Cash Back Credit Cards are a great way to earn some extra cash for purchases you’re going to be making anyways. In the UK, you can find different cash back credit cards that offer all sorts of rewards and bonuses, however, it’s always important to do some research before applying. Continue reading to find out our top cash back credit card picks.
What Are Cash Back Credit Cards?
Cash Back Credit Cards are quite straightforward, for every purchase you make using the card, you get a certain percentage back in cold hard cash. Sounds pretty great, right? Although Cash Back Credit Cards are more rare in the UK these days, they are a great way to improve your credit score all the while earning some extra cash on the side. Other credit cards often give you rewards based on a points system, but cash back credit cards offer more freedom since you can spend that cash back on anything you want. However, there’s a lot of different cash back cards out there and some cards might be better for one person than another person. So it’s important to remember to do your research before applying to a specific card, so you can max out the benefits it offers.
What Do You Need To Consider Before Applying?
Cash Back Credit Cards can be complicated and you might not know where to start or how to find the best carded that suited to your spending needs. It’s important to make sure that you complete your research before you apply for a card. Applying too often will hurt your credit score, since banks will start to question why you suddenly are asking for so many lines of new credit.
The following items outline what you should consider as you’re researching different credit cards:
Cash Back Rate: You definitely will want to pay attention to the cash back rate when you’re looking for a new card. Think about where you spend the most money. If you often eat out at restaurants or like to travel, find a card that will offer you a higher cash back rate in those categories. Your spending habits are what is going to maximize the benefits you can earn from a cash back card.
Annual Fees: Certain Cash Back Cards will charge an annual membership fee, and this can be a deal breaker for some people. If you don’t plan on using your Cash Back Card often, it might not be worth it to have because the annual fee may be higher than the amount of cash back you can earn.
Welcome Offers or Signup Bonuses: Always check if the card you are considering offers some type of introductory bonus. A lot of times, banks will give you some type of perk for signing up for a new card, like offering a high cash back rate for the first three months of opening a new account. You can use this to your advantage, if you plan on making a large purchase and maximize the amount of cash back you can earn.
Interest Rates: Be sure to understand what interest rates the card will charge if you don’t pay off your balance right away. Most cash back cards will charge higher interest rates, so they are better if you can pay off the balance in full each month. A lot of cards will also offer a Introductory 0% interest for the first year when you sign up. Keep this in mind if you plan on making large purchases and paying off the card over time. You can use this to your advantage before the card returns back to its normal interest rates.
Your Credit Score: Most Cash Back Cards will require you to be in good standing with your credit score. Some cards might require you to have better credit scores than others. It’s always a good idea to frequently check your credit, and always make sure you’re paying off bills on time. If you’re planning on needing other lines of credit, such as a home loan, you might want to take this into consideration because applying for a new Cash Back Card will temporarily lower your credit score.
Our Top 3 Picks For Best Cash Back Credit Cards:
1. American Express Platinum Cash Back Credit Card
This is one of the top recommended cash back credit cards across the board in the UK. However, to be upfront right away, American Express is not accepted at all locations, especially at smaller stores and restaurants. But if you do choose to apply for this card, you will get a whopping 5% cash back for the initial 3 months on all purchases. Afterwards, you can get up to 1.25% cash back. This rate is definitely one of the highest around.
2. Tandem Cashback Credit Card
The Tandem Cashback Card gives you 0.5% cashback on all purchases over £1 worldwide and does not have an annual fee. However, there isn’t a welcome bonus for signing up for the card. What sets this card apart is that there are no foreign transaction fees, which most other credit cards usually charge around 3%. So if you’re a world traveler, this card may just be perfect for you.
3. ASDA Money Cashback Credit Card
One of our favorite things about this card is that there is no annual fee! This card gives you up to 1% cash back on all ASDA purchases, which includes ASDA petrol stations, ASDA stores, and George.com. You will need a minimum income of £10,000 and good credit standing in order to apply.
There’s a lot to consider before you apply for a new cash back credit card and start reaping the rewards. You don’t want to apply to a bunch of cards all at once and hope to get approved for one because it can harm your credit score. Be sure to research a few different cards and figure out which one is best for you.
Resources:
https://www.moneysavingexpert.com/credit-cards/cashback-credit-cards/
https://www.fool.co.uk/mywallethero/best-credit-cards/cashback/
https://www.money.co.uk/credit-cards/cashback-credit-cards.htm
