How to Get Cash Back on Your Purchases with a Cashback Credit Card
Published 24th of August 2011·Updated 16 April 2026
Reviewed by: Reviewed for accuracy April 2026
A cashback credit card pays you a percentage of every pound you spend back in cash, usually credited to your card balance once a year. To make a cashback card genuinely profitable, you must pay your balance in full every month; the interest charged on any outstanding balance will always exceed the cashback earned. Used correctly, cashback cards are a simple way to earn money on spending you would do anyway.
Short Summary
Cashback credit cards only benefit you if you pay your balance in full every month. If you carry any balance, the interest rate (typically 20 to 30 per cent APR) will cost far more than the one to two per cent cashback you earn.
Cashback rates typically range from 0.25 to 1.25 per cent on standard purchases, with some cards offering higher rates in specific categories such as supermarkets or fuel. Introductory offers can go higher for the first few months.
Setting up a Direct Debit to pay the full statement balance each month is the single most important step. This removes any risk of accidentally carrying a balance and ensures you never pay interest.
Cashback credit cards also give you Section 75 consumer protection on purchases between £100 and £30,000. If a retailer fails to deliver goods or goes into administration, your card provider is jointly liable for a refund.
How do cashback credit cards work?
Every time you use your cashback card, the card provider earns a small fee from the retailer (called interchange). A portion of that fee is passed back to you as cashback. The cashback rate is expressed as a percentage of your spending: a card paying 1 per cent cashback on a £100 purchase gives you £1 back.
Most cards accumulate your cashback over the year and credit it to your account either annually or monthly. Some cards pay into a separate rewards account or send you a cheque; check the specific terms of the card you choose.
Which UK cashback credit cards offer the best rates?
Rates and eligibility change frequently. As of April 2026, among the most competitive cashback cards available in the UK are:
| Card | Cashback rate | Annual fee | Introductory offer |
|---|---|---|---|
| American Express Platinum Cashback Everyday | 0.5% up to £10,000 spend; 1% above | None | 5% cashback for first 3 months (up to £100) |
| American Express Platinum Cashback | 0.75% on first £10,000; 1.25% above | £25 per year | 5% cashback for first 3 months (up to £125) |
| Barclaycard Rewards | 0.25% on all spending | None | None |
| Santander All in One | 0.5% on all spending | £3 per month | None |
| John Lewis / Waitrose Partnership Card | 0.25% (1.25% at John Lewis and Waitrose) | None | Introductory points bonus |
American Express cards tend to offer the strongest cashback rates but are not accepted everywhere. Visa and Mastercard cashback cards have lower rates but wider acceptance. Many people hold one Amex for day-to-day use and one Visa or Mastercard as a backup.
Always compare current offers on a comparison site such as MoneySuperMarket or MoneySavingExpert.com before applying, as rates and promotional offers change regularly.
How do I set up a cashback credit card correctly?
Follow these steps to use a cashback card without risk:
- Apply for the card. You will need a good credit score to be accepted for most cashback cards; they are not designed for credit-building. Check your eligibility with a soft search before applying.
- Set up a Direct Debit for the full statement balance. Do this immediately after your card arrives. Instruct your bank to pay the full outstanding balance each month, not the minimum payment. This is not optional; it is the foundation of the entire strategy.
- Replace your debit card with your cashback credit card for everyday spending: groceries, petrol, subscriptions, bills. Spend normally.
- Never withdraw cash on your credit card. Cash withdrawals do not earn cashback, incur a fee (typically 3 per cent of the amount withdrawn), and often start accruing interest immediately rather than at the end of the statement period.
- Review your cashback earned annually and consider whether a different card might offer better returns based on your actual spending pattern.
What additional benefits does a cashback credit card offer?
Beyond cashback, using a credit card for purchases over £100 (and up to £30,000) gives you Section 75 protection under the Consumer Credit Act 1974. This makes your card provider jointly liable with the retailer if a purchase goes wrong. For example, if you pay for a holiday that the company subsequently cancels, or buy a laptop that is never delivered, you can claim a full refund from your card provider even if the retailer refuses or goes out of business.
This protection applies when at least £1 of the purchase is made on the credit card, even if the rest was paid by another method, as long as the item costs more than £100 in total.
When does a cashback card not make financial sense?
A cashback card is the wrong product if:
- You carry a balance from month to month. At 25 per cent APR, £500 of unpaid balance costs £125 per year in interest; 1 per cent cashback on £500 of spending returns just £5.
- You have existing debt. Paying down a credit card at 20 per cent APR gives you a guaranteed 20 per cent return, far better than any cashback rate.
- You would spend more because you have a credit card. Cashback is not a reason to increase spending; it is a benefit on spending you would already make.
If you occasionally miss payments or do not trust yourself to clear the balance, a cashback card will cost you more than it earns. Look for a 0 per cent interest card instead, which limits the damage if you do carry a balance.
Frequently Asked Questions
Do I need a good credit score to get a cashback credit card?
Yes. Cashback credit cards are aimed at borrowers with good to excellent credit, as they are designed for people who pay their balance in full and therefore offer no interest income to the provider. The cashback is funded by interchange fees. If your credit score is poor, you are unlikely to be accepted for a mainstream cashback card; work on building your credit history first.
Is cashback taxable in the UK?
Generally, no. HMRC treats cashback on personal credit cards as a discount on spending rather than income, so it is not subject to income tax. If you use a business credit card and claim expenses, the treatment may differ; speak to an accountant if your card use is primarily for business purposes.
How is cashback paid out?
This varies by card. American Express credits cashback directly to your card balance annually (in August for most UK cardholders). Other providers may credit it monthly, pay it as a cheque or transfer it to a linked current account. Check the terms of the specific card before applying.
Can I use a cashback credit card abroad?
Many cashback cards charge a foreign transaction fee of 2.95 to 3 per cent on purchases made outside the UK. This often exceeds the cashback earned on those transactions. If you travel frequently, consider a specialist travel credit card such as the Halifax Clarity or Barclaycard Rewards card (which charges no foreign transaction fee) for overseas spending, and use your cashback card for domestic purchases only.
What happens if I miss a payment?
Missing a payment means your card provider will charge you a late payment fee (typically £12) and may report the missed payment to the credit reference agencies, which will lower your credit score. On some cards, a missed payment also causes you to forfeit any cashback accumulated during that statement period. The Direct Debit for the full balance is your protection against this; set it up immediately and ensure your current account always has enough funds on the payment date.
Is it worth paying an annual fee for a cashback card?
It depends on how much you spend. The American Express Platinum Cashback card charges £25 per year but offers a higher cashback rate (1.25 per cent above £10,000 spend) than its no-fee equivalent (1 per cent above £10,000 spend). If you spend more than £5,000 per year on the card, the higher rate on the fee-bearing card typically offsets the annual charge. Below £5,000 annual spend, the no-fee card usually wins. Calculate your expected cashback at each rate before deciding.