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Guide to Cashback & Rewards Transfer Cards

A guide to

By Nevena Mulyachka and Mark Todd
Nevena is moneyhelpline’s marketing manager, specialising in money products such as insurance, credit cards, loans and savings. Mark is one of the founders of energyhelpline and moneyhelpline. He is regularly on BBC1 and Radio 5 Live commenting on switching and saving.

Last updated 1/12/16

Every time you use a cashback card, you get paid. Similarly, when you use a reward card, you collect points. Both can be an easy way to make hundreds of pounds a year.

When choosing:

  • Make sure you can repay your card in full every month so you never pay interest, which could potentially cost you more than the cashback you gain. Do this by setting up a direct debit and you’ve effectively made your credit card a debit card that pays every time you spend.

  • If you’re not sure you can always repay the card in full, then DON’T pick a card for rewards and focus on a card with a longer interest-free period. Also, if you have debts, try and sort these out before going for a cashback card as you’ll be saving more by keeping these debts cheap. Read our guide to balance transfer credit cards

Currently on the market there are some cashback and rewards credit cards which offer a long interest free period as well as the perks. If you have a good credit score, look out for these so can get the best of both worlds!


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Once you’re in:

  1) Don’t use cashback or reward cards to withdraw money as, in the case of cashback cards, you’ll be charged a fee even if you pay the card off in full, and reward card points are only earned when you spend on the card.

  2) Avoid balance transfers - some cashback cards will charge you a fee and the transfer will take up a lot of your credit limit, leaving you less to spend on. You won’t earn any points on reward cards either.

  3) Set up a direct debit to repay your card in full each month or at least the monthly minimum to avoid getting charged interest. Also watch for annual fees which, although rare, could outstrip your gains on even the very best reward schemes.


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Airmiles credit cards:

A great way to collect frequent flyer miles is by spending on an airmiles credit card. Usually for every £1-5 you spend on these cards, you would get 1 Avios or other frequent flyer mile. Some cards would even give you a bonus if you spend a certain amount in the first few months or 1 year, a companion voucher, or even a free flight. Some of our current top offers are:

  • British Airways American Express (22.9% APR) - Collect 1 Avios for every £1 you spend. Get 9,000 bonus Avios when spending £1,000 within the first 3 months - enough for a short haul flight. Get a companion voucher on £20,000 spent. More info
  • Virgin Atlantic White Credit Card (22.9% APR) - Collect 1 mile for every £1 spent on AmEx and for every £2 spent on Visa. Get 3,000 miles with your first card purchase. More info

Loyalty points credit cards:

A different type of reward that you could get when spending on a credit card is loyalty points for some of the major supermarket chains. Tesco, Sainsbury's and Marks & Spencer all have their own credit cards which give you bonus points for their respective loyalty programmes when you spend on them.

The top offers from them are:

  • Sainsbury's Nectar Purchase Credit Card with 0% on purchases for 28mths - 2 Nectar points per £1 spent on Sainsbury's shopping and fuel, 1 point for every £5 spent elsewhere
  • M&S Credit Card with 25mths 0% purchases - 500 bonus points when you get the new card, then 1 point for every £1 spent in M&S and 1 point for every £5 spent elsewhere
  • Tesco Bank Purchase Card with 1000 Clubcard Points offering 0% on purchases for 17mths - 1000 bonus points when you make a purchase or balance transfer within 2 months of account opening plus 1 Clubcard point for every £4 spent in Tesco and for every £8 spent elsewhere

Make sure you know how much your points are worth. Sometimes obscure points systems can disguise poor payouts. Make sure you compare how much points are worth and how well the deal fits with your own personal habits. For example, a Sainsbury's Nectar point is worth 0.5p compared to a Tesco Clubcard point worth up to 4p (8 times more) but it may be that Sainsbury’s is far more local to you than Tesco.


Cashback credit cards:

Getting paid for spending on a credit card probably sounds too good to be true but this is essentially what happens when you spend on a cashback credit card. The top picks on the market could give you 3-5% cashback on your spending.



Credit Cards

 These guides are for informational purposes only and do not constitute advice. For best personal advice contact a financial adviser.

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