How to Choose the Best Cashback Credit Card in the UK for 2023
Cashback credit cards offer you an easy way to earn money back on your daily purchases. They provide you with a certain percentage of your purchases as cashback, which you can use to pay off your balance, get gift cards or other rewards. Finding the best cashback credit card for your needs can be challenging. There are several factors to consider, such as cashback rates, annual fees, interest rates, welcome bonuses, and eligibility criteria. In this article, we will compare some of the best cashback credit cards in the UK for 2023 and help you find the one that suits your spending habits and preferences.
Four Things To Consider When Choosing A Cashback Credit Card
When it comes to choosing the best cashback credit card for your needs, there are a few things you should keep in mind. Here are some tips to help you make the right choice:
Analyze your spending habits
Before applying for a cashback credit card, take a look at your spending habits over the past few months. Which categories do you spend the most money on? Do you spend a lot on groceries, dining out, travel, or something else? This information will help you find a card that offers the highest cashback rate in the categories you spend the most money on.
Consider the annual fee
While some cashback credit cards come with no annual fee, others charge a fee that can range from a few pounds to over £100. Before choosing a card, make sure to calculate whether the annual fee is worth paying based on your estimated cashback earnings. If you don't think you'll earn enough cashback to offset the fee, it might not be the best card for you.
Look at the interest rate
If you plan to carry a balance on your credit card, you should pay attention to the interest rate. Some cards offer 0% interest on purchases and/or balance transfers for a limited time, while others have a higher ongoing APR. Make sure to choose a card with an interest rate that you can afford to pay if you don't pay off your balance in full each month.
Check the eligibility criteria
Before applying for a cashback credit card, make sure you meet the eligibility criteria. Some cards require a minimum income, a good credit score, or that you have an existing relationship with the bank or provider. Applying for a card that you're not eligible for can hurt your credit score, so make sure to check the criteria before applying.
This is how much money you get back as a percentage of your spending. Some cards offer a flat rate on all purchases, while others offer different rates depending on the category or retailer. You should look for a card that matches your spending patterns and gives you the highest return.
A welcome bonus is the additional cashback or rewards that you receive when you sign up for a credit card and meet specific spending requirements. The bonus amount can vary greatly between cards, with some offering a generous amount that can significantly boost your earnings in the first few months, while others offer little to none or only a modest bonus.
Cashback Credit Card Examples
To compare cashback credit cards, you can use online tools such as comparison websites, calculators and reviews. You can also read the terms and conditions of each card carefully and do some calculations based on your expected spending and cashback earnings.
Below is just a small list of the Credit Cards on the market and things to look out for:
American Express Platinum Cashback Credit Card
The American Express Platinum Cashback Credit Card offers 5% cashback on purchases (up to £125) in the first three months of card membership, followed by 0.75% cashback on spending up to £10,000 per year and 1.25% cashback on spending over £10,000. This card comes with an annual fee of £25 and an APR of 34.3%.
Pros: The card offers a high cashback rate in the first three months and on spending over £10,000 per year, access to exclusive events and offers, and no cap on cashback earnings.
Cons: The card comes with a high annual fee and APR, limited acceptance compared to other cards, and not eligible for a Welcome Cashback Bonus if you hold or have held any personal American Express Card in the past 24 months.
Sainsbury's Bank Nectar Reward Credit Card
The Sainsbury's Bank Nectar Reward Credit Card offers 8,000 bonus Nectar points when you spend £400 at Sainsbury's, Argos, or Tu Clothing in the first two months, plus double Nectar points on Sainsbury's shopping and fuel for two years. It also provides a 0% interest period for up to 6 months on purchases and balance transfers. This card has no annual fee and an APR of 22.9%.
Pros: The card offers a generous welcome bonus and ongoing rewards at Sainsbury's and its partners, a long 0% interest period on purchases and balance transfers, and no annual fee.
Cons: The card has a low cashback rate on other purchases and requires having a Nectar account and shopping regularly at Sainsbury's and its partners to maximize rewards.
John Lewis Partnership Card
The John Lewis Partnership Card offers triple points for the first 90 days when you shop at John Lewis or Waitrose. It also provides a 0% interest period for up to 6 months on purchases and balance transfers. This card has no annual fee and an APR of 31.94%.
Pros: The card offers a high rewards rate at John Lewis and Waitrose, a decent welcome bonus and voucher, a long 0% interest period on purchases and balance transfers, and no annual fee.
Cons: The card has a low rewards rate on other purchases, and requires shopping regularly at John Lewis and Waitrose to maximize rewards.
In conclusion, cashback credit cards can be a great way to earn money back on your everyday spending. However, to find the best cashback credit card for your needs, you need to compare different cards based on factors such as the cashback rate, annual fee, interest rate, welcome bonus, and eligibility criteria.
By analyzing your spending habits, considering the annual fee and interest rate, and checking the eligibility criteria, you can find a card that offers the highest return on your spending and suits your preferences. With the right cashback credit card, you can earn cashback on your purchases and save money in the long run.