Focus on: Holiday cashback boost from Santander

Attention, travel lovers! If you buy a flight, reserve a hotel room or book a holiday through a travel agent using Santander’s 123 credit card between now and August 31, you’ll get an unlimited 1.00% cashback on the cost.

So if your holiday costs £1,000, you get an extra £10 back to spend while you’re away. And, as the card also now comes with a leading 18 months’ 0% on new purchases, you have until the end of 2015 to pay it off – interest free.

Sound good? Here’s the lowdown on this great summer deal.

What’s the deal?

Santander is offering all 123 credit cardholders a summer cashback bonus of 1.00% if they use the card to buy flights, hotels or holidays booked at a travel agent between June 1 and August 31.

The deal, which is available to both new and existing cardholders, is in addition to the card’s usual cashback offering of 1.00% on supermarket purchases, 2.00% at major department stores, and 3.00% at petrol stations and on National Rail and Transport for London (TfL) travel.

Since March this year, the 123 card has also offered an introductory 0% on new spending for the first 18 months.

It comes with a £24 annual fee (waived for the first year if you have a Santander 123 Current Account) and a representative APRs of 16.5% (variable).

Who’s it good for?

This cashback offer is a great opportunity for anyone thinking of booking a trip over the next couple of months.

It really comes into its own if you are planning on splashing out on a dream holiday, as the 1.00% cashback is uncapped – meaning there is no maximum amount that can be earned.

Longer term, the card is also suitable for frequent users thanks to its everyday spending cashback deal of 3.00% on fuel, National Rail and TfL travel, 2.00% in department stores and 1.00% in supermarkets.

Any catches?

The £24 annual fee is the most obvious catch with the 123 card.

But the good news is that it is waived for the first year if you also have a Santander 123 Current Account (which pays 3.00% on balances of between £3,000 and £20,000 but also has a £2 a month fee).

And be aware that your cashback gain could also be wiped out by the credit card processing fees charged by some airlines and travel agents - or by the foreign exchange fee levied by Santander if you pay for a holiday in another currency.

When you arrive at your destination, you will be charged a load fee of 2.95% every time you make a purchase using the card.

And if you use your 123 card to withdraw cash while you are away, on top of this 2.95% fee you'll pay a 3% non-sterling cash fee (minimum £3). Interest will be charged with immediate effect the higher rate 29.9% (variable).

What’s the verdict?

This is a great deal for anyone planning to spend a significant amount on flights, hotels or a holiday – especially as the card also gives you cashback on petrol, groceries and other purchases.

But other purchase credit cards offer rewards as well, such as the Tesco Clubcard Credit Card for Purchases. The deal matches Santander with its 18-months 0% on purchases and gives you five Clubcard points for every £4 spent in Tesco stores and forecourts and one point for every £4 you spend elsewhere – which could work out a better deal if you are staying put this summer.

And if it’s specific travel rewards you’re after, the Virgin Atlantic Black Credit Card is also worth a look.

It has a hefty £140 annual fee, but gives you 18,500 bonus Flying Club miles on your first purchase (within the first 90 days), plus at least one mile for every £1 spent and 11,500 bonus miles when you spend £3,000.

You will be charged interest at 18.9% if you fail to clear your balance in full every month, though.

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.

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