Who is cashback king?

It’s not easy to get money for nothing these days, but choosing the right credit card and current account could help to give your bank balance a bit of a boost – and all for minimal effort.

Here, we take a look at your best options.

Cashback credit cards

A number of credit cards allow you to earn cashback as you spend. However, if you are going to use one, it’s vital that you clear your balance every single month – otherwise the interest you pay will far outweigh the cashback you earn.

So which one is best?

1. American Express Platinum Cashback credit card

The Amex Platinum Cashback Credit Card offers the highest rate of cashback on the market at 5%. The 5% rate applies to all purchases worth up to £2,500 for the first three months – so it’s ideal if you’ve got a large purchase coming up. After that, you’ll earn an ongoing rate of 1.25%.

You’ll also earn 2.5% cashback for one month every year, providing you’ve spent more than £10,001 in the previous 12 months.
And the benefits don’t end there because if you apply before March 16, you’ll also receive a £25 ‘welcome bonus’ which, for the first year, will neatly cover the £25 annual charge on the card.

Watch out for: American Express isn’t accepted in all retailers. If you don’t pay off your monthly balance in full, you’ll be charged a representative annual percentage rate (APR) of 18.7% (variable).

Cashback earned on £1,000 monthly spend = £237.50 over 12 months (£125 in the first three months, plus a further £112.50 over the following nine months).

2. Santander 123 credit card

Next up is the Santander 123 credit card which offers a tiered cashback rate depending on where you spend.

The maximum cashback rate you’ll receive is 3%, which applies on all spending (up to £300 a month) at major petrol stations and on National Rail and Transport for London travel. You’ll also earn 2% cashback at all major department stores and 1% cashback at all major supermarkets.

Watch out for: The card has a representative APR of 18.9% (variable). It comes with a £24 annual fee, though this is waived for the first year if you have (or open) a Santander 123 current account.

Cashback earned on £1,000 monthly spend = £192 over 12 months, minus the £24 fee. (Spend broken down as £500 at supermarkets, £200 at department stores, £100 at petrol stations and £200 on National Rail.)

3. Nationwide Select Credit Card

Available to Nationwide FlexAccount, FlexDirect or FlexPlus account holders only, the Nationwide Select Credit Card offers 2% cashback on sterling purchases for the first three months and 0.5% thereafter. However, you must act quickly to take advantage as this offer ends on February 19.

Watch out for: The card has a representative APR of 15.9% (variable) and this is a limited offer.

Cashback earned on £1,000 monthly spend = £105 over 12 months (£60 in first three months, plus £45 in the following nine months).

Cashback current accounts

As well as earning cashback on your credit card, you can also earn it on certain current accounts. Some will give you cashback each month; others will give you cashback simply for signing up. Here are some of the options.

1. Halifax Reward Current Account

Not only will you receive £100 for switching to the Halifax Reward Current Account, you’ll also receive a £5 cash reward each month.

In addition, Halifax offers customers cashback of between 5% and 15% on purchases from selected retailers such as New Look, Argos, Homebase, Topps Tiles, Eat, and Play.com. You’ll need to select which offers you want to activate when you log in online or through mobile banking, but once you’ve done so, you will earn cashback whenever you use your Halifax debit card or credit card at those retailers. This is paid into your account each month.

Watch out for: You will need to pay at least £750 into your Halifax account each month, pay out at least two direct debits and stay in credit to qualify for the £5 cash reward. Also be aware that cashback offers change regularly and only apply to selected retailers.

Potential earnings = £160 over 12 months, plus additional cashback depending on where you shop and how much you spend.

2. Co-operative Bank current accounts

Switch to the Co-operative Bank Current Account Plus or the Co-op Standard Current Account and you’ll receive a straightforward £100 in cash, as well as a further £25 to donate to a charity (Action Aid, Amnesty International, Carers Trust, Help the Hospices, Oxfam, Water Aid or Woodland Trust).

Watch out for: You will need to pay at least £800 into your account within 31 days of your switch date to qualify. If you choose the Current Account Plus, you’ll need to fund your account with at least £800 every month.

Potential earnings = £100 plus £25 for charity.

3. First Direct 1st Account

You’ll be given £100 in cash when you switch to the First Direct 1st Account. First Direct is renowned for its excellent customer service, so this account could be a good choice if this is important to you. Should you decide to leave the bank within 12 months, you’ll receive another £100.

Watch out for: You must pay £1,000 or more into your account each month to qualify for the cashback.

Potential earnings = £100, and a further £100 if you leave.

4. Santander 123 current account

With the Santander 123 current account you will earn 3% cashback on mobile phone, home phone, broadband and paid-for TV packages, 2% on gas and electricity bills, and 1% cashback on your water and council tax bills, as well as your Santander mortgage payments (up to £1,000 a month).

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

Potential earnings = If you spent £100 a month on council tax, £35 on your water bills, £100 on gas and electricity and £20 on phone, mobile, broadband and TV packages, you’d earn £33 cashback over 12 months (minus the £2 monthly fee).

5. NatWest Select current account

With the NatWest Select current account, whenever you use your Select debit card, you’ll earn at least 1% on qualifying purchases in ‘Cashback Plus Rewards’. You can build up these rewards at participating retailers such as Caffe Nero, Tesco, New Look, Ernest Jones, BP and Cineworld. As soon as your rewards balance hits £5 or more you can bank the cash, exchange it for gift cards from selected retailers or donate the money to charity.

The scheme also applies to NatWest paid-for accounts.

Watch out for: Only 14 retailers are so far listed as participating in the scheme, limiting the amount of cashback you can earn.

Potential earnings = The amount you can earn in cashback will depend on where you spend. But if you spent around £150 a month on qualifying purchases, you’d earn £1.50 a month in rewards, giving you £18 over 12 months.

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