Focus on: Capital One World MasterCard

The cashback credit card market until now has been dominated by American Express, but Capital One has thrown its hat into the ring by re-launching its World MasterCard with a generous cashback offer.

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The card has also scrapped its annual fee, making it a serious contender for the position of market leader.

Here, we take a look at how the Capital One World Mastercard cashback offer works - and whether it is the right card for you.

What’s the deal?

The new offering from Capital One lets you earn up to 5% cashback for the first 3 months up to a maximum of £100 – which is the same amount offered by the Amex card.

After this introductory period finishes, you will earn unlimited cashback on a tiered basis of 0.5% on purchases up to £5,999.99, 1% cashback on all purchases from £6,000 to £9,999.99 and 1.25% cashback on all purchases from £10,000.

Cashback is paid back to you automatically in your January statement each year and is paid directly on to the card.

The previous version of the World MasterCard carried an annual fee of £18, but Capital One has now scrapped this fee so you don’t have to pay at all for the card.

Any catches?

This won’t be the ideal card for you if you are planning a big purchase and will need time to pay it off as you will be charged a representative APR of 19.9% variable which could cancel out any cashback amount you have accrued.

After the introductory period finishes, the cashback is slightly less generous than that offered by American Express. Amex pays 1.25% on all spending over £7,500, whereas Capital One only pays this amount on spending over £10,000.

You have to be a homeowner to apply for the Capital One card and you’ll need an excellent credit history too. You also need to earn at least £20,000 to be eligible to apply, although this is lower than the £30,000 household income required to apply for the Amex card.

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Verdict

Cashback cards are ideal for those who like to spend on a credit card every month and pay the balance off in full, and the Capital One card is streets ahead of many of its competitors.

The American Express Platinum Cashback card offers a similar introductory period of 5% cashback for the first three months, but American Express is at a slight disadvantage as its cards aren’t as widely accepted as MasterCard.

Top Tip

Capital One are very clear that only those with a perfect credit history will be eligible for the card.

You can check if you are likely to be accepted for this deal by using our Smart Search tool.

If you do apply for a cashback or reward card, set up a Direct Debit to repay your balance in full so you don’t get stung by interest charges.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

We’re free, independent and compare all UK credit cards, as well as offering exclusive deals you can’t get anywhere else.

Contact moneysupermarket.com at Moneysupermarket House, St David’s Park, Ewloe, Flintshire, CH5 3UZ. © Moneysupermarket.com Ltd 2011

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