Comparing cashback credit cards

Many people find it handy to have a credit card, whether it’s for emergencies only or to be used every day. But did you know there are eight main categories of credit card? Different kinds of cards suit different people, so it’s worth spending time to decide which credit card is best for you.

The credit card you choose can be quite an important decision. Luckily can help you look at the options and make the right choice.

Our credit cards page shows you the main eight kinds of credit cards, ranging from those that won’t charge you interest to move your existing credit card balance over to a new card, to those that charge zero interest on your purchases, to the top cashback cards which reward you for your spending.

Cashback cards – how do they work?

Let’s look at the top cashback credit cards. As with any credit card, you are given a set limit to what you can spend, and you receive a bill each month. You can choose to pay off the full balance of the card every month, in which case you shouldn’t  pay any interest (subject to exclusions and terms of your card) Or, you can make a smaller payment, down to a minimum set out by the provider, but you will then need to pay interest on the money that is still left on the card.

The top cashback credit cards will give you something on top as a thank you for your spending. This comes in the form of ‘cash’ – but actually it’s paid to you on your credit card bill. 

Here’s how it works. Your card might give you cashback for using it in a certain restaurant. When you use your credit card in that restaurants you will receive a percentage of your total spending back. For example, if you’re offered 3% cashback and you spend £1000 in that approved restaurant, your bill will tell you that you’ve earned £30 in cashback, and pay this onto your account (how this pays into your account will vary depending on card).

Best if you pay regularly

The top cashback cards rarely offer low interest rates, so theyare best suited to people that usually pay the full balance on the card every month. If not, the interest that you owe will probably be more than the value you’ve gained in your cashback.

But if you do clear your balance each month, and you do most of your spending on your credit card, the rewards might build up to give you something for nothing.

A similar kind of card is the rewards card. These give you loyalty points or vouchers as you spend, but are often linked to spending with a certain supermarket or airline. 

How to compare cards makes it easy to look at the different offers and compare the top rewards credit cards. Just choose this area of our credit cards page and we will list out the latest offers from a range of providers.

Take care to look at the details, though, because there might be special offers in place that don’t last long. Some card providers will give you more cashback in your first three months, for example. Others will only give you cashback on purchases in a certain kind of store, like supermarkets. Others have a limit on how much you could receive back each month so the right card for you will depend on how much you spend and where.

Understanding the cost of cards

Another thing you should look at on any credit card is the Annual Percentage Rate (APR).

The APR helps you understand how much it could cost you to use the card. The APR rate is one way to compare how much using a credit card will cost. So if the APR on a card is 17 per cent and you spend £1,000 on it, the interest and charges will mean that you are spending £170 on top of your debt. In the end, then, you will be paying back £1,170. Don’t forget there are other types of fees to take into account such as balance transfer fees or late payment charges. 

If you already have a credit card with an outstanding balance on it, a cashback card might not be the best choice. It’s always a good idea to try and pay off your cards, to stop your interest piling up. A cashback card can make it more tempting to spend rather than pay back.

Other kinds of card

You may benefit instead from choosing zero rate credit cards. These allow you to transfer the balance on your card to a new provider and pay zero interest on this balance for a set amount of time. That way you can work on paying back some of the debt. However most zero percent balance transfer credit cards will apply a fee when you transfer your balance over.

If you know that you will continue to spend on your credit card, you could choose a zero percent credit card that doesn’t charge interest on your purchases.  These are listed out on’s credit card page in a section called ‘Pay 0% interest on your new purchases’.

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