How to make the most cashback

Most of us would welcome a regular cash injection with open arms right now, but with salaries barely moving and the cost of living going up, finding extra income isn't easy.

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Yet one really simple way to make your money work harder for you, and boost your bank balance at the same time, is by earning cashback on your spending.

A number of credit cards already offer cashback schemes, which are ideal if you pay off your balance in full each month. But it's now also possible to earn cashback through your current account, offering you the opportunity to earn even more.

So let's take a look at some of the best deals and see how they compare.

Current accounts

NatWest/RBS current accounts

NatWest and RBS have launched a Cashback Plus Loyalty Programme which is available to both new and existing customers of their Select Current Account
and paid-for current accounts.

What you get:
Earn at least 1% cashback on qualifying purchases in 'Cashback Plus Rewards'. These rewards can be built up with participating retailers, which include Cineword, Caffe Nero, BP, H.Samuel and Ernest Jones. Once your 'Rewards' balance reaches £5 or more, you can then bank the cash, exchange it for gift cards or tickets from selected retailers, or donate your money to charity.

Watch out for: The scheme isn't available to customers with a Basic Account, Step Account or Cash Account. Only 11 retailers have signed up to the scheme so far, limiting the amount of cashback you can earn. More retailers are expected to join in the coming months.

How much you could earn in first year: Given that you'll only earn cashback on certain purchases at certain retailers, it's hard to establish exactly how much money you could earn. But to give you an idea, if you were to spend around £200 a month on qualifying purchases, you'd earn £2 a month in rewards, which would give you £24 over the course of a year.

Santander 123 current account

What you get: 1% cashback on your water bills, council tax bills, and Santander mortgage payments (up to £1,000 a month), 2% on gas and electricity bills, and 3% cashback on mobile phone, home phone, broadband and paid-for TV packages.

Watch out for: £2 monthly fee, and you must pay £500 or more into the account each month.

How much you could earn in first year: Based on an average annual spend of £1,195 on council tax, £376 on water bills, £252 on a Sky TV bundle and £1,344 on energy bills, you'd earn £50.15 in cashback.

Credit cards

American Express Platinum Cashback Credit Card

What you get: Earn 5% cashback on up to £2,500 of purchases in the first three months and 1.25% after that. You'll also earn double cashback (2.5%) for one month every year if you spend more than £10,001 in the previous 12 months.

Watch out for: £25 annual fee, representative annual percentage rate (APR) of 18.7% (variable).

How much you could earn in first year (minus fee):

  • Monthly spend of £1,000 = £212.50
  • Monthly spend of £2,000 = £325
  • Monthly spend of £3,000 = £437.50

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Santander 123 Credit Card

What you get: 1% cashback on supermarket shopping, 2% cashback on department store spending, and 3% cashback on fuel, National Rail and Transport for London spending (up to £300 per month).

Watch out for: £24 annual fee (though this is refunded for teh first year if you already have, or apply for, a Santander 123 current account), representative APR of 22.8% (variable).

How much you could earn in first year (minus fee):

  • Monthly spend of £1,000 (£500 in supermarkets, £300 on fuel, £200 in department stores) = £192
  • Monthly spend of £2,000 (£833 in supermarkets, £542 on fuel, £625 in department stores) = £334
  • Monthly spend of £3,000 (£2,999) (£1,083 in supermarkets, £833 on fuel, £1,083 in department stores) = £474

Sainsbury's Cashback Low Rate Credit Card

What you get: 5% cashback on Sainsbury's shopping for first three months (capped at £1,000 spend per month), plus £5 cashback each month you spend at least £250 on Sainsbury's shopping and at least £250 elsewhere.

Watch out for: Because this is a low rate credit card, the representative APR is 7.8% (variable).

How much you could earn in first year:

  • Monthly spend of £1,000 (£250 in Sainsbury's, £750 elsewhere) = £210
  • Monthly spend of £2,000 (£250 in Sainsbury's, £1,750 elsewhere) = £210
  • Monthly spend of £3,000 (£250 in Sainsbury's, £2,750 elsewhere) = £210

ASDA Money Credit Card

What you get: 1% cashback on ASDA shopping, 1% cashback on at any ASDA petrol station, 0.5% cashback elsewhere.

Watch out for: Representative APR of 14.9% (variable).

How much you could earn in first year:

  • Monthly spend of £1,000 (£250 in ASDA, £300 on ASDA fuel, £450 elsewhere) = £93
  • Monthly spend of £2,000 (£250 in ASDA, £300 on ASDA fuel, £1,450 elsewhere) = £153
  • Monthly spend of £3,000 (£250 in ASDA, £300 on ASDA fuel, £2,450 elsewhere) = £213

Barclaycard High 5 Cashback Credit Card

What you get: Earn 6% cashback on top five purchases in first three months, up to £120. Earn 2% cashback on top five monthly purchases after that, and 0.5% on the rest, providing you use your card 15 times a month.

Each year you'll get a 4% thank you bonus on your top five purchases in the month after your card anniversary.

Watch out for: £24 annual fee, representative annual percentage rate (APR) of 24.8% (variable).

How much you could earn in first year (minus fee):

  • Monthly spend of £1,000 = £221
    (Based on top five purchases in first three months totalling £2,000, top five monthly purchases after that totalling £5,000, and remaining spend totalling £5,000.)
  • Monthly spend of £2,000 = £371
    (Based on top five purchases in first three months totalling £2,000, top five monthly purchases after that totalling £11,000, and remaining spend totalling £11,000.)
  • Monthly spend of £3,000 = £521
    (Based on top five purchases in first three months totalling £2,000, top five monthly purchases after that totalling £17,000, and remaining spend totalling £17,000.)

The winning combination

To maximise your cashback earnings, it's worth combining a cashback current account with a cashback credit card. But which is the winning combination?

Using the above examples, you'll earn the most if you open a Santander 123 current account and earn cashback on your bills, and then pay for the rest of your items using the Barclaycard High 5 Cashback Credit Card.

But of course, ultimately, which cashback deal is right for you will depend on how much you spend each month and where you spend that money.

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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