Finance

Aug 4 2017

Cashback credit cards: 5% for 3 months #how #do #you #get #a #free #credit #report


#cashback credit cards
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‘Close to cashback’ deals

Cashback cards: Video

Extra protection on all spending

Cashback credit cards pay you every time you spend on them, possibly Ј100s a year. The top card pays 5% cashback for the first three months, others give up to 1% on fuel and supermarket spending.

How long will these cards last? This guide is fully up to date. However, there is a chance some card firms could cut cashback, as the EU has capped the charges providers can levy on shops each time you use their plastic, which funds cashback. Capital One, Tesco & RBS have already stopped or downscaled their schemes. So enjoy it while you can.

How to use cashback cards

Cashback credit cards are a form of reward scheme, yet rather than giving points, you get cold hard cash, tax-free, every time you spend on the card. Cash is totally flexible – you can spend it on anything – and it’s easy to compare, so it comes up trumps for almost everyone.

Use your cashback card for ALL normal spending

Once you set up a credit card, every time you use it you get paid. While this isn’t an excuse to spend more, it does mean from now on.

Use the cashback for ALL normal spending, replacing cash, cheques, and other debit, credit and charge cards.

For those who have work expenses they need to reclaim, this can be a powerful way to earn more, at no cost to you, provided you can cope with paying the bill in full each month.

Do check it’s fine with your employer, though, as there’s a chance it could be seen as a taxable benefit (you’ll still be up even if it is).

Not sure you can repay in FULL every month?

If you’re not sure you can repay in full every month, focus on a card with a lower interest rate instead. See the 0% Spending Credit Cards guide.

You’ll save more by keeping your debts cheap instead of going for cashback. Every card application has a credit score impact, so make sure your debts are sorted before applying for cashback cards (see Best Balance Transfers ).

Withdraw cash and you’ll often be charged a fee, plus even if you pay the card off in full you’ll usually be charged heavy interest. The rule’s simple: never, ever, ever use these cards for cash withdrawals.

Beware of setting up regular payments from your credit cards. These are technically called recurring payments (or continuous payment authorities) and while you’re now able to cancel them with your card provider, they have caused trouble for a lot of people in the past (see the Recurring Payments guide for more).

Avoid balance transfers on a cashback card

It’s no coincidence that some cashback cards have balance transfer offers – they want you to both spend on the card and shift debts to them. You’ll pay a fee, but you’ll also take up a lot of your credit limit with the balance transfer, so you’ve got less to spend on.

By far the best thing to do is use separate cards for earning cashback and balance transfers. See the Best Balance Transfers guide.

But before you start mentally counting the cash, ALWAYS follow.

The Golden Rule

Set up a direct debit to repay the card in full each month, so you never pay interest, which would outstrip any gain.

The reason card companies offer cashback or reward schemes is simple. They want to encourage you to spend on the card and pay them interest. The interest cost of all cashback cards dwarfs the cashback you’ll earn.

The easy way to pay off IN FULL

The best way to pay off in full each month is via a direct debit. It allows the card provider to take a variable monthly amount to correspond with what you owe it (see the Direct Debit guide).

Sadly, some providers deliberately omit the ‘pay off in full’ option from direct debit forms, as it means they’ll make less money. If so, just write in ‘pay off in full’ yourself. The firm should honour it, but call after a week or so and check it’s worked.

By doing this, you’ve effectively made your credit card a debit card, but one that pays you every time you spend on it. Always make sure you have enough cash in your account to cover the direct debit.

It may sound obvious, but always stay within your credit limit, else you’ll pay charges for busting your limit, which can often be Ј12 each time.

Best buys The top cashback deals

If you’ve not had a cashback card before, or are about to embark on some big (but planned-for and affordable) spending, you’ve a choice between a card that pays the highest short-term bonus rate of cashback (then a decent rate after), or one that pays good long-term cashback.

One thing to consider is whether you want an Amex or a Visa/Mastercard (the former is accepted by fewer retailers). You also need to think about whether you want to pay a fee – the cards with the highest cashback tend to have an annual fee.

Pre-apply to check eligibility with NO credit file mark

You’ll see that most cards in this guide have a link to our eligibility checker tool, which we’ve designed to allow you to see the probability of getting the card.

We do a ‘soft’ credit search which YOU can see, but lenders CAN’T, so it has no impact on your future creditworthiness – and lets you see the chance of you getting the card without applying for it.

We map the details you give us against lenders’ criteria, and show your chances for all the cards on this page that we can do so for. A new development allows us to check without you following a link from a specific card.

Check your eligibility here

Written by admin


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