Cashback credit cards

Your cashback rate may change after the first 12 months, particularly if you have applied for the credit card on a boosted introductory rate. Cashback rates can drop significantly after the initial period, so it’s helpful to make a calendar note of when this will be and look to switch cards to a better deal.

If you’ve struggled with credit in the past or have a low credit rating, you may find it hard to get a good deal on a cashback credit card. This is because lenders use your credit history to see how responsibly you’ve managed credit in the past before deciding whether to accept your application.

But while the best cashback cards could be out of reach, this doesn’t mean an instant ‘no’ to borrowing if you have bad credit. There are credit cards for bad credit designed for those who have low or no credit but they may come with lower credit limits and higher interest rates. As you pay off your balance each month, you will see your credit score improve over time which can give you access to better credit deals, including cashback cards.

Cashback cards and rewards cards are similar. But while a cashback card gives you rewards in the form of money, a rewards card usually gives you other offers and benefits, such as store loyalty points, air miles or vouchers for particular retailers.

Both types of card reward you for spending, but the better option for you will depend on your spending habits. Rewards cards may offer a higher rate of rewards, but these are often tied to specific retailers, brands or types of spending. Cashback cards, by contrast, typically give you a percentage of your eligible spending back as cash.

Cashback cards typically have high APRs simply because they offer financial benefits (the cashback) and the card companies want to make money. If you carry a balance on your cashback card from one month to another, you’ll be paying interest on the borrowing.

This is what makes it so important to pay your balance off in full every month. If you don’t, you’ll almost certainly be charged more in interest than you earned in benefits.

There are several reasons you might not receive cashback you expected. The purchase may have been excluded under the card’s terms, such as certain transactions, retailers or payment methods.

You may also have exceeded a cashback limit or not met a minimum spending requirement. Cashback can sometimes take time to appear, too. Check your card’s rewards terms and transaction history, or contact the provider if the cashback is still missing.

Cashback credit cards allow you to withdraw cash but, as with all credit cards, it’s not an efficient way to get money. Credit card companies tend to charge high fees to use their cards at an ATM, so it’s best to avoid doing this if you can.

To be eligible for a cashback credit card, you’ll generally need to be aged 18 or over and a UK resident. You may also need to meet additional requirements, such as a minimum income. Providers will consider factors including your credit history, income and ability to make repayments before approving your application. If you use MoneySuperMarket to compare cashback cards, we can show your chances of acceptance, including any cards you’re pre-approved for.

Yes, it is possible to get a rewards debit card. You first need to apply for the current account that the card will be linked to. Depending on the account, you could earn cashback, points or other rewards when you use your debit card for spending.

There is nothing to stop you taking out multiple rewards credit cards, but you may wish to look at whether it is a sensible choice. It might make sense if one is a dedicated store card for an outlet where you shop regularly and the other is a more general cashback card.

But if the features of the cards are similar, then simply having one card which offers the best rate could be a more straightforward option. What’s more there’s less chance of you overspending or getting into debt.  

That largely depends on your spending habits and where you shop. American Express has some competitive cashback cards, although the value you get will depend on how much you spend, the cashback rate and any annual fee.

Other rewards cards may also be worth considering if you regularly shop with particular retailers. For example, the Asda Money Credit Card offers Asda Pounds on spending at Asda, while Tesco’s Clubcard Credit Card lets you collect Clubcard points on your spending.

Yes. Just like standard credit cards, with rewards cards you’ll be covered by Section 75 of the Consumer Credit Act.

You can use Section 75 to claim a refund if you pay for a service you don’t receive, or for goods that don’t arrive. If you buy something priced between £100 and £30,000 in the UK or overseas and something goes wrong, the card issuer is jointly liable.

Cashback rewards vary between credit card providers, with rates, spending categories, annual fees and other terms differing from card to card. American Express offers a range of cashback cards, although its cards may not be accepted as widely as Visa or Mastercard.

Visa and Mastercard are payment networks rather than card providers, and cards using either network can offer different cashback rates and rewards depending on the issuer, such as the bank or building society. When choosing a card, compare the cashback rate, where you can use it, and any annual fees or other charges.