Cashback credit cards offer a fantastic way to earn rewards on your everyday spending. In the UK, a variety of cards cater to different spending habits and financial needs, making it crucial to choose the right one to maximize your returns. This guide provides a comprehensive overview of the best cashback credit cards available in the UK in 2024, helping you make an informed decision.
| Credit Card | Cashback Rate | Key Features |
|---|---|---|
| American Express Platinum Cashback Everyday Credit Card | Up to 1% (0.5% on spending up to £10,000, 1% thereafter) | No annual fee, introductory 5% cashback offer (capped), Purchase Protection, Global Assist, can be difficult to get approved for due to Amex's credit requirements. |
| American Express Preferred Rewards Gold Credit Card | 1 point per £1 spent (convertible to cashback) | Welcome bonus (points), travel insurance, purchase protection, high APR after introductory period, annual fee after the first year, limited acceptance compared to Visa/Mastercard. |
| Barclaycard Rewards Credit Card | 0.25% | No annual fee, simple rewards structure, widely accepted due to Visa network, not as lucrative as higher cashback cards. |
| NatWest Credit Card | 0.5% | No annual fee, straightforward cashback, offered by a major UK bank, may have eligibility requirements based on credit history. |
| Santander All in One Credit Card | 0.5% cashback on all spending (up to £3000 per year) | Low APR, 0% on purchases for a limited time, balance transfer options, annual fee, cashback cap, potential penalties for missed payments. |
| Tesco Clubcard Credit Card | Clubcard points that convert to cashback | Points earned on Tesco purchases and everyday spending, can be redeemed for Tesco shopping, travel, and other rewards, specific redemption values vary, potential for high rewards for frequent Tesco shoppers. |
Detailed Explanations
American Express Platinum Cashback Everyday Credit Card
This card offers a tiered cashback system, rewarding you with 0.5% cashback on spending up to £10,000 and 1% cashback thereafter. It's a good option for those who spend more than £10,000 annually. A key advantage is the lack of an annual fee, making it a cost-effective choice for long-term use. Amex cards offer perks like Purchase Protection and Global Assist, but acceptance can be limited compared to Visa and Mastercard. The 5% introductory offer, while attractive, is capped, so calculate if your spending will benefit from it.
American Express Preferred Rewards Gold Credit Card
While not directly offering cashback, this card earns Membership Rewards points for every £1 spent. These points can be converted to cashback, travel rewards, or other benefits. It's particularly appealing for those who value flexibility in how they redeem their rewards. A significant benefit is the welcome bonus, often a substantial number of points. However, an annual fee applies after the first year, and Amex acceptance is not as widespread as Visa/Mastercard. Travel insurance is included as a perk.
Barclaycard Rewards Credit Card
This card provides a straightforward 0.25% cashback on all spending. Its primary advantage is simplicity and the widespread acceptance of the Visa network. It’s a solid choice for those who prefer a no-frills cashback card without an annual fee. However, the cashback rate is relatively low compared to other cards, making it less rewarding for high spenders. This card also offers spending insights via the app.
NatWest Credit Card
The NatWest Credit Card offers a flat 0.5% cashback on all eligible purchases. This makes it a simple and straightforward option for earning rewards on everyday spending without complex tiers or categories. As a product from a major UK bank, it provides the security and convenience associated with a well-established financial institution. Eligibility requirements are in place, so a good credit score is beneficial.
Santander All in One Credit Card
This card offers 0.5% cashback on all spending, up to a maximum of £3,000 per year. This translates to a maximum annual cashback of £15. It often features a low APR and introductory 0% purchase period, making it attractive for those looking to manage existing debt or make large purchases. However, it comes with an annual fee, and the cashback is capped, limiting its potential for high-volume spenders. Missing payments can result in penalties.
Tesco Clubcard Credit Card
This card earns Tesco Clubcard points on purchases made at Tesco and elsewhere. These points can then be redeemed for Tesco shopping, travel, and other rewards. The value of the rewards varies depending on how you redeem them, but it can be a lucrative option for frequent Tesco shoppers. The card’s value is tied to the Clubcard ecosystem, so understanding how to maximize point redemption is key. The potential for high rewards depends on your spending habits at Tesco and your chosen redemption method.
Frequently Asked Questions
What is a cashback credit card?
A cashback credit card rewards you with a percentage of your spending back as cash or credit on your account. It's a way to earn money back on your everyday purchases.
How do cashback credit cards work?
You use the card for purchases, and a percentage of your spending is credited back to your account, usually monthly or annually. The percentage varies depending on the card and the type of purchase.
What are the advantages of using a cashback credit card?
You earn rewards on your spending, effectively reducing the cost of purchases. It can be a good way to save money if you manage your spending responsibly.
What are the disadvantages of using a cashback credit card?
High APRs can negate the benefits if you carry a balance. Overspending to earn more cashback can lead to debt.
How do I choose the best cashback credit card for me?
Consider your spending habits, the cashback rate, any annual fees, and other benefits offered by the card. Compare different cards to find the one that best suits your needs.
What is APR and why is it important?
APR stands for Annual Percentage Rate, the interest rate you'll be charged if you don't pay your balance in full each month. A lower APR saves you money on interest charges.
What is a welcome bonus?
A welcome bonus is a reward offered to new cardholders, often in the form of cashback or points, after meeting certain spending requirements within a specified timeframe. It can significantly boost your initial rewards.
Can I get a cashback credit card with a poor credit score?
It's more difficult, but some cards are designed for those with fair or poor credit. These may have lower cashback rates and higher APRs.
Are cashback rewards taxable?
Generally, cashback rewards are not considered taxable income by HMRC in the UK. However, consult a tax professional for specific advice.
What happens if I miss a payment on my cashback credit card?
You may incur late payment fees, and your credit score could be negatively affected. It's important to make timely payments to avoid penalties.
Conclusion
Choosing the best cashback credit card in the UK depends on your individual spending habits and financial priorities. Consider the cashback rate, annual fees, and any additional benefits offered by each card to maximize your rewards and make the most informed decision. Remember to always pay your balance in full each month to avoid interest charges and maintain a healthy credit score.