What is a cashback credit card?

A cashback credit card gives you money back every time you spend. Instead of reward points or air miles, a percentage of your purchases comes straight back to you as cash. It’s an easy way to make your everyday spending work a bit harder.

There’s lots of choice and each cashback card is different. Some only reward UK spending, others give cashback on purchases worldwide. Some pay your earned money into your bank account, others deduct it from your card balance. Some pay you monthly, others annually. Some cards have an annual fee, while others are completely fee-free.

Used wisely, a cashback card can be a smart financial tool. Pay off your balance in full each month, and you’re essentially earning free money on things you’d buy anyway. Just remember, if you carry a balance over and pay interest, that can quickly wipe out any cashback you earn.

Are you eligible for a cashback credit card?

Thinking about getting a cashback credit card? Before you apply, it’s worth knowing what card providers look for. While each lender sets its own rules, there are some common criteria:

  • Age and UK residency: You’ll usually need to be at least 18 and living in the UK.

  • Regular income: A steady income helps show lenders you can repay what you spend.

  • UK bank account: You’ll need one to make repayments, and some providers may favour existing customers – though it’s not always a deal-breaker.

  • Healthy credit history: Lenders want to see you’ve managed credit well in the past. If you’ve had issues like defaults or bankruptcy, you might find it harder to get approved.

  • Minimal recent credit applications: Making lots of applications in a short space of time can raise red flags.

Since every provider is different, it’s a good idea to check their specific requirements before applying. That way, you’ll avoid unnecessary credit checks and boost your chances of getting the right card for your spending habits.

How do cashback credit cards work?

Cashback credit cards give you a percentage of your spending back as a reward. Here’s how they work:

Start earning cashback as soon as you spend

Once your card arrives, you can begin using it for everyday purchases.

Start receiving your cashback

Your cashback is usually credited to your statement monthly or once a year. Some cards pay it straight into your current account, while others reduce your card balance instead.

Repay in full to get the most from your card

Cashback cards sometimes come with higher interest rates than your standard credit card. For this reason, it’s best to clear your balance each month so you don’t incur any interest at all. Paying just the minimum could leave you with interest charges that cancel out any cashback you've earned. Setting up a direct debit for full repayment can help you stay on top.

And remember – if you’re choosing a credit card over a debit card, you’ll get added ‘Section 75 protection’ if something goes wrong with a purchase of £100-£30,000 (depending on your credit limit). It’s just one more reason why a credit card can be a smart way to spend.

How much cashback can I earn?

The amount of cashback you earn depends on the card you choose. Some cards offer a smaller rate, like 0.25%, while others give 1% or more on your spending. Some providers offer a flat rate on all purchases, while others reward you with a higher cashback rate for spending at certain retailers, or once you hit a spending threshold.

Many cards also run introductory offers, giving a higher cashback rate for the first few months, typically capped to a certain limit, and then dropping to the standard rate.

For example, one leading cashback card offers 5% cashback on purchases for the first five months, up to a maximum of £125. To qualify, you need to spend at least £3,000 over the year, and the cashback is paid out after 12 months.

Keep an eye out for limits, as some providers cap the total cashback you can earn.

Is a cashback credit card right for me?

Cashback credit cards can be a clever way to make your spending go further, but they don’t suit everyone. If you’re the type who pays off your balance in full each month and use your card often, you could earn a tidy bit back on your everyday spending.

However, if you tend to carry a balance, the interest you’ll pay could quickly cancel out any cashback. In that case, a low-rate card might make more sense.

Before you sign up, think about how you use your card and whether you’ll really benefit. The best cashback card is one that rewards your habits, not one that costs you extra.

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Page updated on 9th October 2025, Reviewed by Richard Groom