What is a Cash Back Credit Card?

What Is Cash Back Credit Card

Multiple banks offer cash back credit cards including banks such as American Express and Aqua. Cash back cards do exactly what they say, they offer you a small percentage of cash back on money you spend in certain shops or in some cases all of the spendings you do. Below we have explained what a cash back credit card is in more detail, who offers them and if they are a good option for those looking to open a cash back credit card account.

What Can You Receive Cash Back On?

Each cash back credit card offers different percentages of cash back for their cardholders. Some cards offer up to 5% of cashback for three months for new cardholders. Most cards offer cashback of 0.5-1% for any spends up to around £5,000 and some may offer a higher percentage of cashback for those who spend more than £5,000 in a year. Some cards charge a fee for you to have the account other are fee free.

With cashback credit cards it is important for you to pay back what you owe in full every month to receive the maximum cash back available for your spends. It is also important as not keeping up with your credit card repayments will negatively affect your credit score.

Who Offers Cash Back Credit Cards

Most banks offer some form of a cash back credit card. American Express offers a Platinum Cashback Everyday Credit Card that offers 5% cash back for 3 months and then 0.5% cash back on spends up to £5,000 or 1% cash back on spends if you spend over £5,000 in a year. This card had no fee and has 22.9% APR. The negative for the American Express platinum everyday cashback card is that it is an AMEX card which is not accepted in some shops. 

Another good cash back card is the Aqua Reward credit card. This card is good for those who don’t have a great credit score. Your cashback is capped at a maximum of £100 a year and it is paid out annually, but if you’re thinking about getting a credit card this one is a great option for those who’re looking to improve their credit score and receive some cash back at the same time. 

Some supermarkets such as Sainsbury’s offer a credit card that allows you to receive store points when you spend. The Sainsbury’s Nectar credit card allows you to earn 2 Nectar points for every £1 you spend in Sainsbury’s. You will also get 750 points for every £35+ shop in the first 2 months. If you’re doing a large shop the best way to earn the most points during this time is to split it up into smaller shops of £35. 

Should You Get a Cash Back Credit Card

Depending on your credit score you will be able to apply for different cash back credit cards. Never take out a card if you don’t think you will be able to pay back the balance in full every month as this will mean you lose your cashback by paying APR and your credit score will be affected. There are lots of cash back credit cards on the market so make sure you choose the card that is best for your financial situation and credit score.