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Cash back credit cards

Cash Back Credit Cards and Reward Credit Cards are a great choice if you clear your balance each month as they pay you a percentage of your spend in air miles, points or cash.

The Benefits of Cashback Credit Cards

There are various offers available and the cash back available and threshold limits vary from provider to provider.

For example, when you apply to some companies they offer introductory bonuses such as 5% cash back on purchases for the first 3 months with the cash back then reduced to a maximum of 1.5% with no limit on purchase amounts there after.

Payments are usually made once per year and there is often a minimum payment amount so check your terms and conditions. If you choose the 5% cashback card and your spend was £300 per month over a 12 month period, including the joining bonus you would earn a maximum of £85.50.(Typical APR 18.9%)

Another Cash Back card offers a standard 3% no matter how much or how little you use your card, and so again if you spent £300 per month over a 12 month period you would receive £108.00 and the Typical APR is 18.9%.

The Benefits of Rewards Cards

With Reward Cards, points are usually allocated such as 1 point per every £2 spent (which is the same as the 0.5% cash back). Once you have collected a certain amount of points you could be issued with a reduction on a bill, air miles or cash depending on the scheme offered by that credit card provider.

We are not talking huge amounts of cash back, it is dependant really on how much you use your card but any extra money you can earn is certainly a good thing. Remember to always check for a low APR and compare what charges are applied for late or missed payments on the credit card you choose. The reason being you were not able to clear your card in full or were late on a payment, then having a good rate and low credit card charges would prove very beneficial. Generally most credit cards do not have annual fees but this is not always the case so be careful when completing your application to ensure you are aware of any annual fees.

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