This type of credit card gives you cash rewards for your spending. There are a few different types of cashback offers available on the market, with some cards offering a one-off cashback payment as part of a special promotion and others earning cashback as a percentage of your spending. Some reward credit cards also let you convert reward points to cashback on your account. You can use this guide to compare cashback credit card options, learn how they work and discover how you can get the most value out of this type of credit card.
Comparison of cashback credit cards.
Guide to cashback credit cards and offers
How do cashback cards work?
A cashback credit card gives you rewards in the form of pounds or credit on your account. These offers vary between cards, with some earning cashback as part of an ongoing rewards program and others providing a one-off cashback reward offer for new customers.
In fact, there three main ways you can earn cashback on your credit card purchases, which we’ve outlined here:
- Instant cashback when you make an eligible credit card purchase. For example, if you make a credit card purchase of £1,000 and there is a 2% cashback promotion, the credit card provider will give you £20 back.
- Cashback promotional offers on sign up. Some cards have a cashback promotion for new customers. These offers usually require you to apply before a set date and spend a specific amount within the first few months you have the card.
- Cashback via a credit card rewards program. As well as using points for flights or merchandise, some credit card rewards programmes give you the option to redeem your points for cashback on your account.
How can I compare cashback credit cards?
Here are the key details to look at when you’re comparing different cashback credit card options:
What are the advantages and drawbacks of cashback credit cards?
Weighing up some of the pros and cons could help you determine whether a cashback credit card is right for you.
- Money in your pocket. This type of reward offer gives you the chance to get money back for paying with plastic.
- Pound value. Instead of earning points per £1 spent, cashback credit cards offer a straightforward reward. If you know roughly how much you’re going to spend, you can easily calculate the potential benefit of cashback.
- Other extra features. Credit cards with cashback promotions may offer other features such as complimentary travel insurance, rewards programmes and concierge services.
- Annual fees. To get the best earn rates, you’ll generally have to pay an annual fee. The value you get back from the rewards should be higher than the annual fee – if it isn’t, the card’s not worth your while.
- Rates of interest. If the cashback offer is a feature of a more premium product, you may find that it comes with higher interest rates. Make sure you can repay the amount you’ve charged for the cashback (as well as other purchases) before the end of the statement period.
- Limited rewards. Some cashback credit cards may have a cap on the number of times you can redeem a cashback offer. For example, some many only allow you to receive the cashback once, while others may allow you to take advantage of it up to a capped amount of times in a set period.
How to apply for a cashback credit card
If you’ve decided you want a cashback credit card, you can apply online in around 10-15 minutes via a secure web service. But before you apply, make sure you meet the eligibility requirements and have the necessary documents needed to complete your application. These will vary from card to card, but you can usually expect the following:
- Age. Cardholders must be at least 18 years of age.
- Residential status. Most credit cards require cardholders to be permanent UK residents.
- Minimum income. The minimum income requirement will vary between cards. Some providers don’t require you to have any guaranteed yearly income at all. Some providers will specify simply that you must have a regular income, and some will require a minimum household income.
- Credit history. Most UK credit card issuers require applicants to have a good credit history, although there are cards available for those with poorer credit ratings.
Necessary documents and information
Once you’ve provided all of this information and hit “submit”, you should receive a response regarding your application within 60 seconds. If you’re approved, you’ll receive your card in the mail within 1-2 weeks. If the card has a cashback offer, you should read the Product Disclosure Statement to confirm the terms and conditions and when you can expect to receive the cashback credit in your account.
If you’re looking for a new credit card, a product with a cashback offer could provide you extra incentive to pay on plastic. While cashback offers can be rewarded, they always come with terms and conditions, so make sure you understand what these are and compare your options before you apply for the card.
Popular questions about using cashback credit cards
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