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Cash back: one of the most flexible credit card rewards going - but just how much are you going to earn and which is the best deal for your spending? We reveal the highest paying offers and look at how each option could work best.

The highest paying cash back deal

While there have been new offers coming onto the market recently, American Express have kept up and arguably still offer the best cash back deal on their Platinum card.

American Express Platinum credit card
	Cash back 5% for 3 months (up to £100 cash back), then 1.25% unlimited on all purchases, plus a yearly bonus offer	Apply here »
Representative Example: 14% p.a. variable on purchases. This is equivalent to 18.5% APR representative variable based on a credit limit of £1,200 and including a £25 annual fee. American Express Services Europe Limited, Belgrave House, 76 Buckingham Palace Road, London, SW1W 9AX.

American Express Platinum now offers a flat rate cash back scheme, awarding 1.25% cash back on all purchases.

Cash back is unlimited and can be earned on all spending (that is wherever retailers accept AmEx).

In addition, it offers four times the amount of cash back (5%) during the first 3 months of account opening - on spend up to £2,000 (that's up to £100 cash back).

More uniquely however, is the yearly bonus awarded to existing customers who'll get to earn double cash back again for a month each anniversary if they've spent £10,001 or more during the last 12 months.

You can read more about the finer specifics in our American Express Platinum credit card review.

The only downside to the AmEx deal is that not all retailers accept it - there aren't a huge number who don't, but if you shop regularly in H&M, Screwfix or B&Q you might want to keep looking.

ASDA on the other hand has recently started to accept it.

There is a handy list of shops that do accept AmEx on www.whoacceptsamex.co.uk .

Calculating cash back for individual spending

Picking out the best cash back credit card isn't as straightforward as for 0% purchases or 0% balance transfers - because it's a lot more variable and does depend on how much is spent each month as well as where purchases are made and the type of goods/services most often bought.

For a better idea of the different cash back credit card deals available, including a useful calculator tool that will give you some indication of what you could earn, see our cash back credit cards comparison page.

Cash back credit cards: the low down

This is where it get's little bit like revisiting your maths GCSE or watching mid-morning TV with Mr. Lewis.

To work out which is the right cash back credit card for your spending habits there's a few things to consider and even a tiny bit of maths (but don't worry we'll help with that!).

Where do you spend?

In terms of shops there are 3 types of cash back credit card:

• Cash back on all purchases (shop anywhere)
• Cash back on selected goods/services (shop most places, buy specifics)
• Cash back at selected retailers (high shop loyalty)

Cash back on all purchases is normally the catch all and often the best deal generally.

However, people who spend most of their money on groceries, petrol and clothes (who doesn't?) could consider cards such as Santander 123 Cashback credit card which offers variable cash back on specific goods.

Santander 123 Cashback credit card
	Cash back 1% supermarkets, 2% department stores, 3% petrol (up to £300 spend)	Apply here »
Representative Example: 18.9% p.a. variable on purchases. This is equivalent to 22.8% APR representative variable based on a credit limit of £1,200 and including a £24 annual fee. Santander Cards Limited, 2 Triton Square, Regent's Place, London, NW1 3AN.

The offer is basically, 1% at supermarkets, 2% at department stores and 3% on petrol (earnings on fuel spend is limited to a spend of £300 a month).

This may often work out a better deal for those who mostly use credit cards for everyday spending as the cash back rates are higher.

Cash back at selected retailers can work well occasionally, but often the restrictions on shops make it hard to really benefit. For example, the Barclaycard Freedom scheme suffers from this limitation quite considerably.

Other limitations

Some cash back deals have earnings limits - where you can only earn cash back on spending up to a certain amount.

These limits are generally seen on introductory bonuses, but are occasionally applied to annual spend - something high spenders should look out for.

Tiered vs flat rate cash back

After shops and purchases, there are generally speaking two types of ways cash back is awarded: as a flat rate or as a tiered scheme.

Flat rate is a simple % applied across the board, tiered schemes work instead by awarding different % of cash back depending on how much is spent - they can work positively for large spenders, or alternatively some deals offer more cash back on lower spending.

It seems like a ridiculous question but estimating annual spend is the only way to settle whether you'd be beter off with a tiered or flat rate cash back credit card.

So, for example, the Capital One World Mastercard [click through for cost of credit] earns like this:

• 0.5% on up to £5999.99
• 1% on £6,000 to £9999.99 And...
• 1.25% on amounts over £10,000

Cash back is awarded annually so once it's paid out cardholders start earning back at the 0.5% rate until they spend £6k and then proceed upwards again.

Tiered cash back credit cards may offer higher rates, but it's worth checking whether you'd reach the spending limit - and how much you'd spend over it on the higher rate too.

Monthly Spend	Tiered cash back: as above	Flat rate cash back: 1.25%
£250	£15	£37.50
£1000	£94.98	£150

You can check this a little more easily with our cash back rewards calculator here.

Introductory bonuses

Introductory periods of cash back are always welcome but they should be doubly welcome if you've got a period of high spending on the horizon, that way you can truly make the most of the higher earnings.

For example:

• American Express Platinum: 5% cashback first 3 months [click through for cost of credit].
• Capital One World MasterCard: 5% cashback first 99 days [click through for cost of credit].

In the case of both the cards above, there's a limit to earning power which means spenders can only get £100 back during the introductory period but, even so, that would entail a spend of £2,000.

With high-spend it's also worth looking out for cards with 0% purchase periods to spread the cost of spending. Leeds Building Society is currently one of the only cards to offer cash back with a 0% purchases deal, however the cash back is only 0.5% and the purchases deal only lasts for 3 months.

Finally - avoiding interest and the terms

The final point is the most important one: taking out any rewards credit card means not paying interest on any of your purchases.

Interest will eat through the money you make much faster than you can earn it back so remember too that not only will cash advances (including gambling transactions and buying foreign currency) not earn you cash back they will lose you money because they generally aren't included in the interest free period and so avoiding interest entirely is rarely possible even if you pay back in full.

Simply though, avoid paying interest by only spending (on purchases) what you can pay back in full within the card's interest-free period.

Setting up a direct debit to clear the full amount so that you never forget is often a sensible idea.

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