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Cashback credit cards reward you for spending by giving you a small amount of money back whenever you use it. So the more you spend, the more cashback you can earn.
It’s easy to see the appeal of this type of card, but cashback credit cards aren’t a good option for everyone. This is because the amount you earn can work out less than your monthly interest and other charges – unless you clear your bill in full each month.
Best cashback credit cards
The cards listed below have been ordered by the value of cashback earned during the first year, fees, and then APR. Depending on your circumstances you may be offered a higher APR.
The cashback earned in the first year is calculated by Fairer Finance, using average household spending data from The Office for National Statistics. This figure includes bonus rewards, minus the annual fee. Be aware that you may earn less cashback after the end of any promotional periods.
Provider | Representative APR | Rewards | Fees & Charges | Value of cashback earned in first year | |
|---|---|---|---|---|---|
 | 55% | 0.5% cashback on purchases up to and including £15,000 each year. 1% cashback on purchases totalling over £15,000 in each year. | £15 monthly fee | £723.48 | |
 | 28.9% | 0.25% cashback on everyday spending. | n/a | £207.75 | |
 | 49.8% | 0.5% cashback (up to £15 per month) on all purchases. | £15 monthly fee | £195.99 | |
 | 36.3% | Welcome bonus of 5% cashback (up to £125) for the first three months. 0.75% cashback on spend up to £10,000 within card membership year. 1.25% cashback on spend above £10,000 within card membership year. | £25 annual fee | £189.98 | |
| | 28.9% | £20 Amazon Gift Card added to your account. 1% back in rewards when you shop at Amazon. 0.5% back when you shop anywhere else. Amazon Prime members get 2% back in rewards during eligible Amazon shopping events like Prime Day. | n/a | £187.93 |
This table is checked and updated regularly. We aim to provide accurate information but prices, terms and conditions of products and offers can change, so double-check first. Credit card data is provided by Fairer Finance.
What is a cashback credit card?
Cashback credit cards give you a percentage of the amount you spend back as cash, which is then paid into your bank account or credit card balance regularly – usually once a month or once a year. The amount of cashback is usually fairly low – around 1% – so if you spend £200 you’ll receive £2 back.
What’s the difference between a cashback and a rewards credit card?
A cashback credit card is a type of rewards credit card, but rather than receiving points or vouchers you are simply rewarded with cash. This means there aren’t restrictions about where you can spend your rewards: the cash is deposited directly into your card balance or bank account and you can spend or save it in any way you choose.
This differs from a rewards credit card, where you build up points as you spend. Although these can be lucrative, they can only be redeemed at selected retailers, or exchanged for flights, hotel rooms and car hire.
How do cashback credit cards work?
You can use a cashback credit card in much the same way that you would use any other type of credit card: use it to shop in-store or online, up to your credit limit. Each month you will be sent a statement detailing how much you’ve spent, and the minimum payment that you need to make. Your statement will also show how much cashback you have earned.
If you’re wondering how the card provider is able to give cashback, there’s a simple explanation. When you make a credit card payment, the card issuer (Mastercard, Visa or American Express) receives a small fee for processing your payment. When you have a cashback credit card, the provider shares this with you by paying a small percentage of cashback on your transaction.
Some card providers offer introductory promotions, which means you can earn more cashback for a set period of time after opening the account. Others cap the amount that you can earn per transaction, or per year, or offer cashback for spending in particular stores.
In exchange for this perk, you might be charged an annual fee, or need to spend a minimum amount before you earn cashback on your purchases. There’s also a risk that you could lose your cashback benefits if you miss a minimum monthly payment.
You can maximise the amount of cashback you earn by using your card to cover your everyday spending, such as your supermarket shop. However, it’s best not to do this if there’s a risk of overspending as you should always be able to promptly repay what you’ve spent. Remember, you must clear your balance in full each month before being charged interest because cashback cards typically come with a high APR.
How to choose a cashback credit card
With so many options available, it can be hard to know which cashback credit card to choose. The following three questions should help you to narrow down your options:
- Can you clear your balance in full each month? If not, you could pay more in interest than you earn in cashback. Another option, such as a 0% interest purchase card, may be a better choice.
- Is there an introductory offer? Usually, cashback cards only offer 1-2% cashback on purchases, but sometimes offer up to 5% during the introductory period. This means you could enjoy a substantial discount on your purchase if you repay the balance in full before interest is charged.
- Is there a fee or a minimum spend, or are there any restrictions? Some providers don’t pay any cashback unless you spend a minimum amount. Others charge an annual fee, although this may not be applied during the first year. Some providers will only pay cashback up to a set maximum limit while others will only pay cashback when you spend with selected retailers. Check the terms and conditions carefully, and work out how much you stand to save before you apply.
Advantages of cashback credit cards
There are some clear advantages to cashback credit cards:
- Over the course of a year, you could earn cashback worth hundreds of pounds just by using your card for everyday spending, such as supermarket shopping and fuel.
- Introductory offers can be generous, giving you an opportunity to earn extra rewards.
- You can sometimes boost your cashback by spending in certain stores.
- You will be covered by Section 75 of the Consumer Credit Act 1974 when you make a purchase with a value of between £100 and £30,000, which means you won’t be out of pocket if the retailer goes bust or there’s a problem with your order.
- Managing your card well can help to improve your credit score over time.
Disadvantages of cashback credit cards
Cashback credit cards also have some disadvantages:
- Cashback credit cards may have a higher APR than other types of credit cards, so unless you pay your bill in full you could save more with a 0% interest purchase card or 0% balance transfer card.
- Some cashback credit cards charge an annual fee, or require a minimum spend before you’re able to earn any cashback.
- Unless you pay your bill in full each month you could easily end up paying more in interest than you receive in cashback.
- Some transactions are exempt from cashback. These can include balance and money transfers, cash withdrawals, buying foreign currency and travellers’ cheques.
- Some providers cap the amount of cashback or rewards you can earn each month or year.
- Some providers only pay cashback when you spend with certain retailers.
- You could lose your cashback if you miss a monthly repayment.
Cashback can be paid infrequently – for example, some providers only pay out once per year.
Am I eligible for a cashback credit card?
Although many cashback cards are only available to those with good credit scores, some providers offer credit cards for bad credit. However, cashback credit cards are best avoided if you think there’s a risk of overspending, as you will almost certainly pay more in interest than you earn in cashback unless you pay your bill in full.
If you decide to go ahead with an application, always use an eligibility checker to find out how likely you are to get the card you want. This will also give you an indication of your credit limit and APR. Checking your eligibility won’t leave a mark on your credit report, and will help to protect your score as it reduces the chance of an unsuccessful application.
Eligibility criteria vary between providers, but in general you will need:
- To be over 18.
- A UK resident.
- Have a permanent address.
- To be earning a minimum annual income.
- Not declared bankrupt or have any recent individual voluntary agreements (IVAs) or County Court Judgements (CCJs).
It’s also important to check your credit score. This three-digit number is used by lenders when deciding whether to offer you credit. Several different factors influence your credit score, including missed or late payments, defaults or high use of credit.
Checking your credit score regularly gives you the opportunity to pick up on errors that need to be corrected, or take steps to improve your score. You can check your credit score for free with credit reference agencies like Experian and Equifax, or via platforms like ClearScore and Credit Karma.
How to apply for cashback credit cards
In most cases, you can apply for a credit card online. If you prefer, you can sometimes apply in person at a branch of the relevant bank. The provider will run a credit check, so you will need to share some information including:
- Your contact details.
- Your address (including all addresses for the last three years).
- Your bank account details.
- Your income.
You may get an instant decision when you apply online, but don’t be surprised if you have to wait a few days to find out if your application has been successful.
If your application is approved, the next step is to sign a credit agreement. You can usually do this digitally when you apply online, otherwise you will be sent paperwork to sign and return. Before you sign, check your credit limit, APR, any fees and charges and the minimum monthly payment as these might be different than advertised.
Don’t sign unless you’re happy with everything, because you can still walk away with no obligation. You also have a 14-day cooling-off period, so even if you change your mind after you’ve signed you can cancel the agreement without explaining why. However, you will need to repay any money you have borrowed, plus any interest due.
If your application is unsuccessful, don’t try again with a different provider right away. Each application you make leaves a mark on your credit report, and several applications in a short period of time can give lenders the impression that you’re experiencing financial difficulties, making it harder for you to get credit in the future.
Instead, check your credit report to see what you could do to improve your credit score, and repeat the steps above when making your next application to reduce the risk of being turned down again.
How to use a cashback credit card
The following four tips will help you make the most of your cashback credit card:
- Clear your balance in full each month
The value of any cashback you earn will probably be wiped out by the interest your provider charges if you don’t clear your balance each month. Ideally, set up a direct debit to repay the full amount each month.
- Use your card to cover everyday spending
To maximise your cashback, use your credit card in place of your debit card to cover everyday spending. Just make sure you’re not overspending and can afford to clear your credit card bill.
- Boost your cashback
Depending on the card you have, you may be able to boost the cashback you collect by shopping in certain stores or with particular brands, or within a set time after opening your account.
- Check for fees and restrictions
Before you apply for a cashback credit card, check if you will be charged any fees for using the card, if there’s a minimum amount you need to spend before you’re eligible for cashback, and if there are any limits on how much cashback you can receive and how you can earn it. Only continue with the application if you’re confident that you will spend enough to qualify, while still being able to clear your balance in full each month.
Is a cashback credit card right for me?
Unless you can be confident that you will repay your credit card bill in full every month, then a cashback credit card may not be the best option for you. In fact, you stand to make more savings with a card that will help you save money on interest, such as a 0% interest purchase card, or a balance transfer credit card.
If you’re already struggling financially, and are tempted to apply for a cashback credit card because it seems like a good way to access some extra cash, this could quickly make your situation worse as your debt will increase.
Before you apply, consider all your options, including seeking free debt help from charities such as:
Cashback credit cards frequently asked questions
Cashback credit cards give you a small percentage of money back whenever you use your card. In most cases you can expect to earn 1-2% cashback on purchases, but you may earn as much as 5% during promotional periods. Various providers offer this type of credit card, but some require you to spend a minimum amount before you can earn cashback, so it’s important to read the terms and conditions to see which one is right for you.
Yes, you can still earn cashback and rewards when you add your cashback and rewards credit card to Apple Pay or Google Pay.
Your credit limit is personal to you, and is based on a number of factors, including your credit score, income and affordability, as well as the lender’s policy. Using an eligibility tool before you apply may indicate the credit limit that you are likely to be offered. You can find these on the provider’s website or on comparison sites.
There are several different types of credit cards available, including 0% interest purchase cards, balance transfer credit cards, credit builder cards, and credit cards for bad credit. Some prepaid credit cards also offer cashback, and this is a feature of some bank accounts, too.
Usually, the credit cards that offer the most generous cashback charge an annual fee and require a minimum spend. For this reason, you would need to consider your spending and weigh up how much cashback you stand to earn, minus what you expect to pay in interest and other fees. Depending on your circumstances, you may find that it doesn’t add up to pay a fee – or realise that a cashback credit card could cost you more in interest and charges than you could save in cashback.
No, there are some card transactions that aren’t eligible for cashback. This includes interest charges, fees, balance transfers and topping-up prepaid cards.
No, if you buy something and return it your rewards or cashback balance will be adjusted to reflect the final amount that you spent.
No, you don’t need to pay tax on cashback and rewards because they are seen as a rebate on money you have spent, rather than a source of income.
Although you will usually need a good credit score to qualify for the best cashback credit cards, some providers do offer these cards to people with a poor credit score. Use an eligibility tool before you apply to reduce the risk of an unsuccessful application, and think carefully about whether you can afford to clear your balance in full each month – if you can’t, your rewards are likely to be cancelled out by interest and other charges.
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