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Advantages of Using Cashback Credit Cards

Earn Extra Money by Using a Credit Card With Cashback Facility

Sep 23, 2009 Neil Gunn

Why not earn some extra money from cashback credit cards, which should be used for everyday spending and not kept for that emergency or one-off payment.

Using a cashback credit card allows consumers to get something back from the credit card company. Quite simply all purchases that people would normally make should be put on the card in order to take advantage of the rewards offered.

Advantages of Cashback Credit Cards

A frequently used cashback credit card can be worth hundreds of pounds annually to the consumer. However like any other financial product check out a number of reputable financial websites for the current best deals.

At this time (September 09) cardholders can get:

1% cashback on all spending
1% cashback on the first £2,000 of spending and 0.5% thereafter
5% cashback on all spending for 3 months

There are some more specialised deals also on the go, including:

5% cashback on Transport for London spending

Applying For a Cashback Credit Card

As usual there are a number of terms and conditions attached to these offers including a fairly wide spread of interest rates from 12.4% – 19.9%, which although high, when considering the current all time low bank base rate, is not far off the rates for a more conventional card.

Before applying for a cashback credit card a consumer should consider a number of points first:

Cash withdrawals attract very high rates of interest

It is absolutely essential to repay the monthly balance in full. Failure to do so nullifies any cashback advantage. A good way to make sure it’s always paid on time is to set up a variable Direct Debit with the bank. This means the credit card company can draw the total amount owing each month.

Usually, although not exclusively, the best returns are to be had only in the first year

Beware of the card that offers both cashback and balance transfer options unless the full amount can be repaid each month. If there is a balance transfer at a low or 0% rate and other spending, the card issuer will allocate monthly payments to the debt with the lowest interest rate first (balance transfer) which means the other spending will continue to accrue heavy interest charges until repaid.

Best Credit Scores

With the knowledge that the people with the best credit scores will attract the best rates of interest it’s always a good idea for people considering a new credit card to check their credit score first to ensure its accuracy. This can be done for a small charge at the Credit Reference Agencies listed below.

Credit Reference Agencies:

Experian.co.uk

Equifax.co.uk

This information is obtained from the reputable sources listed below but is not offered as financial advice.

Martin Lewis moneysavingexpert.com, website accessed 23/9/09

Moneysupermarket.com, Credit Cards, website accessed 23/9/09

The copyright of the article Advantages of Using Cashback Credit Cards in Personal Budgeting/Finance is owned by Neil Gunn. Permission to republish Advantages of Using Cashback Credit Cards in print or online must be granted by the author in writing.