Fancy earning cash while you spend? Then check out these cashback credit cards!
There can't be many people out there who actually enjoy receiving their credit card statement. After all, it effectively simply gives a list of debts that we need to pay off, or risk being charged interest.
However, if you're one of the many people who always pay off the credit card balance in full, each month, your attitude to seeing your bill may change depending on the credit card you choose. Because, although the credit card currently residing in your wallet may have been there for years, you may well find that there's a better one out there for you, which will actually reward any spending with cold, hard cash!
Yes, believe it or not there are such things! The cards to which I refer are known as cashback credit cards and there are a surprising number on the market. And by using one, you'll be given back a percentage of whatever you've spent each month as actual cash.
Here's a round up of some of the cashback credit cards currently on the market and who they're ideal for:
| Provider | Card | Scheme | Conditions | Ideal For? |
|---|
| Abbey | Cashback | 0.5% cashback on first £499 spent
each month. 1% cashback on
spend over £500. | Maximum cashback based on
£20,000 spend per year. | Those regularly spending
over £500 each month. |
| More TH>N | Cashback | 0.5% cashback on spend up to
£20,000 each year.
| Maximum cashback based on
£20,000 spend per year. | General spending |
Morgan Stanley
| Platinum | 2% cashback up to £2,000
1% cashback on spend over £2,001 | Double cashback until 1.3.06.
Reverts to 1%/ 0.5% cashback respectively after this period. | Those with large
purchases to make before 1.3.06. |
American Express
| Platinum | 0.5% cashback on spending up to £3,000
1% cashback on spending up to £7,500
2% cashback on spending over this.
| No payment made if cashback earned is less than £5. | High spenders |
American Express
Apply via the Fool | Blue | 2% cashback for first 3 months.
0.5% cashback on first £2,000
spent each year then 1% on
spending over £2,001.
| £15 servicing fee if annual
spend is less than £500.
Cashback below £5 will be forfeited. | Those with large
purchases to be
made in the next
three months. |
American Express
Apply via the Fool | British Airways
Premium
Plus | 1.5 BA Miles for virtually every £1
spent, redeem BA Miles on a
British Airways flight and, if you've spent 15,000 on your Card, get a
second ticket.
| | Those who travel
frequently with
British Airways. |
| Leeds BS | Cashback | 1% cashback on spending up to
£2,000; 0.5% cashback on
spending over £2,001.
| | Lower spenders. |
Marbles
Apply via the Fool | Cashback | 0.5% on purchases up to £20,000 yearly spend. | | General Spending |
| Bank of Ireland | Cashback | 0.5% cashback on spending up
to £2,999. 1% cashback on
spending over £3,000 up to £20,000. | Maximum cashback based on
£20,000 spend per year. | General spending |
As you can see, there are certainly a fair number to choose from. And interestingly, as they all offer slightly different cashback schemes, you should be able to find the one that suits your exact spending pattern. For example, whilst the American Express Blue card would suit someone needing to spend a large amount on Christmas presents in the next couple of months, if you knew you would be using the card for all of your spending over the next twelve months (i.e. sums of £20,000+) you may find the American Express Platimum card would potentially provide greater levels of cashback. And of course, to maximise cashback earned you really need to consider putting all spending on the card, however trivial.
However, it's worth noting that although cashback cards are brilliant for effectively earning free cash, they are not for the undisciplined. Slip up just once with a monthly payment and you'll find yourself badly stung with both interest and charges which will far outweigh any cashback earned. They should therefore only be considered by those with an established record of paying off their balance in full, each month. And it's worth setting your balance to be paid automatically by direct debit too, to ensure there is no chance of an overdue payment.
But, for those disciplined enough to have one, cashback credit cards are fantastic entities, rewarding spending that you'd be doing anyway with actual cash, which adds up surprising quickly!
You can find out more, or apply for the Morgan Stanley, American Express and Marbles cards in ourCredit Card Centre.
