Compare the best cashback credit cards

What are cashback credit cards?

Cashback credit cards earn you cash in proportion to the amount you spend on them. This is known as your “earn rate”. A card that rewards you with £1 for every £100 you spend would have an earn rate of 1%, for example.

Higher earn rates might be offset by an annual card fee – but this could be worth paying depending on how much you plan to use the card and therefore how much cashback you think you’ll get over the year.

Earn rates aren’t as high as they were a few years ago, and there are fewer cashback credit cards around. But there are some tasty intro bonuses up for grabs, from elevated earn rates for a set period of time to one-off lump sums – provided you meet the minimum spend requirements.

Some cards only offer the occasional opportunity to earn cashback when you spend with a specific brand they’ve partnered with, but dedicated cashback cards usually let you earn money back on every purchase.

How do cashback cards work?

A cashback credit card gives you cash rewards on pretty much all your spending, usually in the form of credit on your account. Cashback offers vary between credit cards and sometimes even an individual card can have multiple earn rates that apply depending on where you spend. Some cashback credit cards also offer an introductory “sign-up” bonus as a sweetener.

In fact, there are three main ways you can earn cashback on your credit card purchases, which we’ve outlined here:

1. 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.
2. 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 of having the card.
3. Cashback via a credit card rewards programme. As well as using points for flights or merchandise, some credit card rewards programmes give you the option to redeem your points for cash added back to your account.

How to choose cashback credit cards

Here are the key details to look at when you’re comparing different cashback credit card options:

• The cashback amount. Weigh up the value of the cashback you can earn based on your spending habits and the overall cost of the card (i.e. the annual fee and purchase rate). This will help you decide if the rewards are worth it.
• Reward caps. Some cashback cards limit the amount of money you can get from them. For example, you might be able to get 1% cashback per £1 spent but have a limit of earning £50 per month in cashback.
• Introductory offer requirements. If the cashback reward is offered as a special promotion, make sure you understand the terms and conditions before signing up. Depending on the offer, you may want to look for the date the offer expires, spending requirements or participating retailers to take advantage of the cashback reward.
• Ineligible transactions. While most everyday purchases are eligible to earn cashback rewards, transactions such as cash advances, bill payments and credit card fees are usually ineligible. Check these details before you get a card to decide if it suits your spending habits.
• Rewards value. If you have a card that earns points and want to redeem them for a cashback reward, check to see if there are other rewards (such as flights, travel upgrades or merchandise) that have a retail or regular price value that is higher than the cashback amount. This will help you get the most value out of your rewards.
• Annual fee. Weigh the card’s annual fee against the cashback you expect to earn to work out how much value you’ll get from the rewards. Ideally, the amount of cashback you get should be worth more than the annual fee.
• Other card features. Make sure you also consider the card’s standard variable purchase rate, as well as any additional charges, fees and complimentary extras. Along with the rewards and annual fee, these features will help you decide if the card suits all your needs.

Advantages and drawbacks of cashback offers

Weighing up some of the pros and cons could help you determine whether a cashback credit card is right for you.

How to apply for a cashback credit card

If you’ve decided you want a cashback credit card and have chosen the one that best suits your needs, you can usually apply for it online. 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:

Eligibility requirements

• 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. Others will simply state that you must have a regular income, and some will require a minimum household income.
• Credit history. Most cashback credit cards require applicants to have a good credit history.

Necessary documents and information

• Proof of identification. You’ll be required to provide a copy of your driver’s licence and/or passport for proof of identification.
• Proof of income. In some cases, you might be asked to provide your employer’s details, as well as recent payslips. If you’re self-employed, you might need to provide a recent tax return.
• Financial information. You may need to provide other information about your finances including debts, liabilities and expenses.

Once you’ve provided all of this information and hit “submit” on your online application, you should get an immediate response regarding your application. If you’re approved, you’ll receive your credit card in the post 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 in your account.

What’s the best cashback credit card for bad credit?

Unfortunately, you’ll generally need a good credit score to be eligible for the best cashback credit cards. It’s worth taking the time to rebuild your credit score by paying bills on time and checking you’re on the electoral roll before you apply for a cashback credit card. Using an eligibility checker will allow you to see which cards you’re most likely to get without hurting your credit score.

Bottom line: is a cashback credit card worth it?

If you use your credit card regularly, but are still able to pay off your balance each month, a cashback credit card can give you a better return on your spending. You’ll earn cashback on all your purchases, which can make a big difference over time, as long as you’re disciplined about using your card and repaying the balance.

If you don’t use your card much, or have trouble clearing your monthly balance, you may find that a cashback credit card doesn’t represent good value for money – especially if it also charges an annual fee.

Earn cashback on business spend

A business credit card is one way to boost spending power and enjoy a little flexibility in handling your company’s cashflow. And on top of this, you could enjoy perks like cashback.

Frequently asked questions

• Are cashback credit cards taxable?

  No, cashback on credit cards are not subject to tax as it is seen as a rebate on money you’ve spent rather than your income.

• How much cash can I expect to get back when I spend?

  While the cashback rate varies from product to product, most cashback returns are somewhere between 0.5% and 2% of the total value of the transaction. This figure can jump when you look at merchant and retailer bonus cashback reward schemes, or when a fixed rate of cashback is offered (i.e. £20 when you first use the card).

• Can I use cashback to pay the annual fee or my credit card debt?

  Yes, you can generally use cashback rewards to pay towards your card’s annual fee or the outstanding balance of a credit card.

• Are there any 10% cashback credit cards?

  Currently, there are no credit cards in the UK that offer 10% cashback on your spending. 5% is the highest available cashback deal – the Amex Cashback Everyday Credit Card offers 5% cashback up to £100 during the first 3 months of card membership.

• When is cashback paid back?

  This depends on your credit card provider. Some providers pay cashback monthly, quarterly or annually. Some credit cards may require a minimum yearly spend before you qualify for the cashback reward. Always check the terms of the deal before applying.

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To make sure you get accurate and helpful information, this guide has been reviewed by Rachel Wait, a member of Finder's Editorial Review Board.

Written by

Chris Lilly

Head of publishing

Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio

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Chris has written 612 Finder guides across topics including:

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