How to Earn Cash Back Rewards with your Credit Cards

Using cashback credit cards, you can earn points or real-life money when you shop for your favourite products. If you’re trying to be savvy with your cash or boost your credit score, opting for a credit card with cashback is a great option.
We’re going to look at how cashback cards work and what they can offer you.

How do cashback credit cards work?

When you spend with a cashback credit card, you’ll get a little money back on your purchase, or points that you can put towards buying something else. Most cashback card providers have induction offers, so you could earn even more points over the first few months with your card.

American Express, for example, offers 5% cash back on purchases made in the first three months. Most offer around 2%, so for every £100 you spend, you could receive £2 in rewards. There are a range of credit card providers that offer bonuses for using their cards.

Remember, cashback credit cards will only be beneficial if you clear the balance every month. If you have to pay interest on your debt, you might find that your debt repayments are more than any rewards you might get back.

How to earn cashback using your cashback credit card

Flat rate cashback

A flat rate on your cashback card means you’ll earn the same percentage on every purchase. Whether you spend £5 or £50, you’ll earn a predetermined percentage cashback. The most common rates of cashback are between 1.5% and 2%. This type of card is good for people who don’t want to monitor the different offers and would prefer a flat rate.

Bonus categories

There are some cards that give you more points or cashback when you spend on certain products or in certain stores. As an example, The Sainsbury’s Bank credit card. You can get 8,000 bonus points when you spend over £400 at Sainsbury's or Argos within the first two months of signing up for your card. You could also get two points per £1 spent at Sainsbury's or Argos, and one point per £5 spent everywhere else. And you have plenty of choice on how to spend your points - you can use them as money off your next shop, or transfer them into British Airways air miles (400 Nectar = 250 Avios).

Other cards offer bonuses for shopping in restaurants, spending on travel or even in petrol stations.  

Rotating rewards

This type of bonus has different cashback options available for a limited time – usually three months. You have to be quick if you want to snag any rewards or cashback, though only use the card for a purchase you planned to make anyway – otherwise it won’t be a saving. Rotating rewards cards can be a great option for making the most of the different rewards as they become available.

Who is eligible for a cashback credit card?

Anyone over the age of 18 and a UK resident can get a credit card (some providers may request over 21s). It all depends on certain criteria to get approved.

Before you apply, you’ll want to be sure of the interest rate. This is the amount extra you’ll have to pay on any money you owe – so be sure you can cover the full cost every month to avoid defaulting on your loan.

Getting approved for a cashback credit card depends on several factors:

  • Credit score – Your credit score is a score that reflects your history of repaying money you owe. It can show how often you meet payments on utility bills, your mortgage and your phone contract. Lenders use your credit score to see how much you borrow and the repayments you make or miss. A low score, or no score at all, could make it harder to get a credit card (however, there are some credit cards designed to help build your credit score).
  • Income – Many credit card providers will require you to be in employment and earning a certain amount a month. Any total borrowing amount will depend on your monthly wage.  
  • Financial history – If you have been declared bankrupt or have a County Court Judgement (CCJ), you may not be eligible for a credit card.

What is a good credit score?

Credit scores are a particular number that, in turn, corresponds to a particular rating, such as “fair” or “good”. At a minimum, you’ll want your credit score to be fair. Some providers will want your score to be very good or excellent. These providers usually offer better perks and bonuses. However, as we have mentioned, there are some credit card providers which are specifically designed to help improve people’s credit score, so even if your score is low, you may get approved for one of the credit-boosting cards.

Best cashback credit cards

The best cashback credit card for you will depend on which one offers rewards for the places you shop regularly. It’s also important to consider interest rates and what you can afford to pay each month. The best card for you is always one you can afford to have. Below are some of the top credit cards with cash back.

  1. American Express

This is one of the top cashback credit cards, thanks to a great introductory rate with 5% cashback for the first three months to a max £100.

  1. Amazon Platinum

Receive a £40 Amazon voucher on acceptance and then 0.75 pts for every £1 spent at Amazon. If you’re an Amazon Prime member, you could receive 1.5pts per £1. Use the card at other stores and you’ll receive 0.25 points per £1. One point is equivalent to 1p at Amazon, so it will all add up if you’re a regular shopper there.

  1. Sainsbury’s Bank

If you shop at Sainsbury’s, this card could be the one for you. And if you spend over £50 a week here, you could see yourself getting a nice £40 bonus. You’ll receive two points for every £1 spent at Sainsbury's or Argos. You will also get one point for every £5 spent in a different store. One point is equivalent to 0.5p at Nectar partners (this is where you can swap your Nectar points for discounts at partners such as eBay or British Airways.

  1. M&S Bank

Love shopping at M&S? This could be the one for you. Using this card will see you get two points for every £1 spent at M&S in the first year of having your card. After that you’ll get one point per £1 at the store and one point for every £5 spent elsewhere. One-point equals 1p at M&S and the points are automatically converted into vouchers.

  1. Tesco

A great card for Tesco shoppers, this card will give you one Clubcard point for every £4 spent at Tesco, and one point for every £8 spent elsewhere. One point is between 1p-3p at Clubcard partners.

Bonus points

You can get bonus cashback by combining your cashback options. For example, if you shop online at Tesco, you can use TopCashback to do your shopping and earn a reward through that service. Then pay for your shopping using your Tesco credit card to get the bonus points there. TopCashback is offering up to 16.5% cashback for Tesco shoppers.

For more top tips on how to save, check out our other articles about cashback!