How to earn cashback on your shopping

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credit card cashback

credit card cashbackHow would you like to earn money while you spend? It sounds too good to be true, but if you pay for your shopping with a cashback credit card you get money back with every purchase. Imagine that! It’s a bit like someone paying you to shop.

There are various cashback cards on the market and they typically give you back between 1% and 3% of your annual spend as cash. If, for example, you spent £3,000 over 12 months, you could get back up to £90.

Some cards entice customers with higher cashback rates for a limited period. The World MasterCard from Capital One is currently offering 5% cashback for the first three months, up to a maximum of £100.

You might also be able to earn different percentages for different types of spending. Santander’s 123 Card, for example, pays 3% cashback on fuel spending, 2% if you use your card in a department store or 1% in the supermarket.

A number of cards vary the cashback according to the amount you spend. So, you might earn 0.5% cashback if you spend up to £4,999, 1% on spending between £5,000 and £9,999 and 1.25% on anything above £10,000.

The cashback is usually calculated once a year with the money either credited to your account or sent as a cheque.

There must be a catch. Surely you don’t get money for nothing?

Cashback cards can be a great way to shop, especially in the run-up to Christmas. But they don’t suit everybody. Many of the cards charge interest of close to 20%, so if you can’t afford to pay off your balance in full each month, then the interest on your debt will easily outweigh the benefit of any cashback.