Cash back credit cards are an excellent method to earn a modest return on every purchase. They provide a percentage rebate on each transaction.
While some credit cards reward spending with points that can be used for flights, hotels, and a variety of other exclusive deals, the simplicity of cash back cards may make them more enticing to some consumers.
Depending on the card you choose and how much you spend, cash back credit cards normally offer between 0.25 and 1.25 percent cash back on every purchase.
If your credit card rewards you at a rate of 1 percent, you will receive £1 for every £100 you spend.
The cash back might accumulate to a significant amount over time, despite the appearance of modest gains. For instance, if you spent £12,000 over the course of a year and earned 1% on all purchases, you would receive £120.
Some cash back credit cards come with hefty introductory offers that allow you to earn additional cash back for a limited time.
However, like with all credit cards, it is crucial to be aware of any costs that could eat into your returns and to pay your balance in full every month to prevent interest charges.
Rachel Springall, a finance expert at Moneyfacts, explains, “Cash back programs are a terrific way for consumers to earn a little bit of money when they purchase or even pay their bills.”
As the cost of living grows, consumers may explore cash back offers, but they must pay off their credit cards each month and maintain a positive balance in their checking account; otherwise, whatever cash back they earn could be wiped out by interest costs.
To get the most out of any offer, it’s worthwhile to spend a few minutes reviewing the terms and conditions.
This is Money evaluated the six most profitable credit cards and ranked them appropriately.
1. American Express Platinum daily cash back credit card
This card offers 5% cash back on all purchases made during the first three months of card membership, up to a maximum of £100.
Each year thereafter, you will receive 0.5% cash back on all purchases up to £10,000, and 1% cash back on all purchases thereafter.
As long as you spend at least £3,000 per year, every £1 you spend on items is eligible for cash back.
In addition, there are no monthly or annual fees to consider.
Taking into consideration the promotional deal, an individual who spends £1,000 per month for the first year will receive £155 cash back.
It’s also worth noting that you can opt in to a variety of discounts and deals from retail and travel partners. Typically, these will be available for a limited time only.
Caution: If you fail to pay your payment in full each month, you will be charged an annual percentage rate of 25.7%.
In addition, several UK merchants do not take Amex since it costs them a fee of approximately 3 percent for each transaction.
It is crucial to know where you can and cannot use your American Express card; you can find out the locations that take Amex here.
There are presently just a limited number of major chains that do not take it, but you are more likely to encounter issues in smaller stores throughout the United Kingdom.
However, significant companies like Tile Giant, Dunelm, and Sky continue to refuse Amex.
2. American Express Platinum credit card cash back
What’s to appreciate: Another card from American Express, this one requires an annual fee of £25 in exchange for a somewhat higher reward rate.
This card offers 0.75 percent cash back on purchases up to £10,000 per year, and 1.25 percent cash back on all other purchases.
Similar to the ‘everyday’ card described above, it offers 5% cash back for the first three months, but with a £125 maximum.
Taking into consideration the promotional deal, a customer who spends £1,000 per month for the first year will receive £202.50 cash back.
In addition to the £25 annual charge, there is also the issue that not all retailers accept Amex, although this is becoming more common.
If you do not pay it off each month, the annual percentage rate (APR) will be 31%.
3. Master card Santander All-in-one Credit Card
This card is a master of none and a jack of all trades. It virtually rivals the versatility of the two Amex cards.
It is not simply a cash back card, but also a balance transfer card and an international card.
It normally offers a 0.5% reward on all purchases, but it is presently offering consumers the opportunity to earn 1% cash back when using the card abroad through September 18 of this year.
It is important to note that to qualify, you must spend at least £500 and make purchases in the local currency.
The retailer offers a free service that allows you to earn up to 15% cash back from a range of big shops, which is another cash back bonus.
Once you’ve activated retailer offers, you’ll be able to select the deals and earn cash back when shopping in-store or online at participating retailers.
Even though this credit card is not the most lucrative cash-back card available, it comes with two other advantages.
There is no balance transfer fee and 0% interest on balance transfers for 26 months.
Balance transfer credit cards have long offered a mechanism to reduce costly interest payments by transferring debts from an existing credit card to a new card, typically with the promise of 0% interest for a specified period.
Santander’s offer is among the finest in this category, particularly because it does not impose transfer fees.
In addition, it does not charge any international transaction fees for purchases and cash withdrawals done abroad in the local currency.
Unfortunately, there is a £3 monthly cost to use this service. This amounts to £36 per year.
All cash withdrawals will incur cash transaction fees, and cash withdrawals will accrue interest from the date of withdrawal.
If you do not pay off your balance each month, you will be charged an annual percentage rate of 24.7%.
4 and 5 Lloyds Bank or Halifax Cash back Master card Credit Card
What’s to appreciate: Both of these credit cards offer 0.25 percent cash back on the first £4,000 spent per year, followed by 0.50 percent cash back thereafter.
There is no limit on the amount of cash back you may earn, and you will also receive a £20 cash back incentive if you spend £1,000 within the first 90 days of account opening.
This means that a customer who spends £1,000 each month for the first 12 months could earn £70 in cash back.
The store deals provided by the Lloyds Banking Group allow you to earn up to 15% cash back on unique offers from a variety of major retailers.
In addition, there are no monthly or annual fees associated with this card.
Aside from ensuring that you pay it off each month to avoid the 19.9 percent APR, there are no significant risks to consider.
6. Barclaycard Rewards Visa Card
This card offers 0.25 percent rewards on all everyday purchases, as well as no foreign transaction fees.
Although the reward is negligible, the card is noteworthy due to its abroad cost-saving advantages.
You will be able to withdraw cash from an ATM and purchase souvenirs at no cost. Additionally, the card has no yearly or monthly fees.
Additionally, Barclays provides access to store deals that allow you to earn up to 15% cash back on exclusive offers from a selection of big retailers.
Remember to pay off your monthly bill in full to avoid incurring the 23.9% APR.
