Has your provider slashed the cashback payable on your card credit card? Don't worry, there are still some good deals out there.
If you tend to pay your credit card bill off in full each month (good for you!) you may already have one of these a cashback credit card.
These cards effectively give you back a percentage of your spending as 'cash', in the form of a cheque once a year, or as credit on your account. Users tend to put everything (groceries, petrol etc.) onto their card and pay it off in full and as spending £500 a month on a 1% card can earn £60 annually in cashback, you're 'paid' for essentially doing nothing!
However, whilst many cards have offered generous rates of cashback in the past, Moneyfacts has found that more than a dozen have reduced their rates by up to half over the last year. This drastic reduction is thought to be partly because users tend to pay off their bills in full each month and so providers are literally 'giving money away'.
Reduced Cashback Cards:
| Provider | Old Cashback Rate | Date of
change | New Cashback Rate |
|---|
Nationwide BS
Cash Reward | First six months = 1%
Then = 0.5% | 1/3/05 | First six months = 0.5%
Then = 0.25% |
Accucard
Cashback MC | £0-£20,000 = 0.8% pa | 1/10/04 | £0-£20,000 = 0.5% pa |
easyMoney
Cashback MC | £0-£20,000 = 0.8% pa | 1/10/04 | £0-£20,000 = 0.5% pa |
| Blue Amex | First 3 months = 2%
Then = 1% | 1/10/04 | £0-£2,000 = 0.5%
£2,001+ = 1% |
Bank of Scotland
One Visa | £0-£20,000 = 0.5% pa | 1/7/04 | £0-£20,000 = 0.25% pa |
| Halifax One Visa | £0-£20,000 = 0.5% pa | 1/7/04 | £0-£20,000 = 0.25% pa |
| Egg (Green) | 0.5% | 1/4/04 | 0.1% |
Source: MoneyfactsHowever, don't despair you can still find some good cashback rates out there:
Current Best Buy Cashback Credit Cards:
| Provider | Cashback Rate | Spend
period | APR | Interest Free
Period | Annual
fee |
|---|
| Abbey Cashback | £0-£499 = 0.5%
£500+ = 1% | Monthly | 16.9% | 59 days | No |
| Amex Blue | £0-£2,000 = 0.5%
£2,001+ = 1% | Yearly | 14.9% | 56 days | *£15 |
Bank of Ireland
Moneyback | £0-£2,999 = 0.5%
£3,000-£20,000 = 1% | Yearly | 14.9% | 46 days | No |
| Leeds and Holbeck | £0-£2,000 = 1%
£2,001+ = 0.5% | Yearly | 16.9% | 55 days | No |
MORE TH<N
Cashback rewards | £0-£20,000 = 0.5% | Yearly | 16.1% | 51 days | No |
Morgan Stanley
Cashback | £0-£2,000 = 2%*
£2,001+ = 1%* | Yearly | 15.9% | 55 days | No |
Source: Moneyfacts*This is a double cashback offer until 1.8.05
*Fee is waived if £500 is spent on the card before its anniversary date
As you can see it is still possible to receive up to 2% cashback (although the 2% rate from Morgan Stanley is a 'double cashback deal', and only available until 1 August).
Amex also provides a Platinum card (although this one didn't come up on the Moneyfacts Best Buys) which offers up to 2% cashback, depending on how much you spend. And you must spend at least £500 annually on either of the Amex cards, should you wish to avoid paying the £15 annual fee. So if your card has slashed its cashback rate, consider moving to one of its competitors but remember these points:
1. Shop Around for the Best Deal always check the current Best Buys before signing up to a new deal. You could also give your current provider a ring and see if it has any alternative cards that you would be better suited to.
2. Match Your Card To Your Spending Pattern the current number of cards available is vast, but you can easily narrow it down by noting your spending patterns.
If, for example, you spend £300 each month, Morgan Stanley or Leeds and Holbeck will give you the most cashback. If, however, you spend over £1,000 each month, you could choose Abbey or Bank of Ireland (but note that Bank of Ireland only has a 46 day interest free period!).
And if you're a really big spender, you could choose Amex, Abbey or Morgan Stanley, as there is no cap on spending.
3. Pay Off Your Card On Time or you'll risk paying interest! The easiest way to do this is to set up your payment by direct debit.
So if you always pay off your card in full, or if you're looking for a better deal, consider the current Best Buy cashback cards and you could be earning free money.
You can apply for the Morgan Stanley cashback card, or find out more in our Credit Card Centre.
