Cash back: Who offers the most?

cash and credit cards©

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?

In this guide we'll look at the highest paying offers, how to maximise on cash back earnings, and how each option could work best.

The highest paying cash back deal

New offers come onto the cash back market often so check out our main table for a list of some of the currently available options.

Our earnings estimator will help to find a card offering the best returns based on average monthly spending but it might also be useful to ask yourself the following questions to find the specific features you're looking for.

aqua rewardaqua reward0.5% cash back on all purchases
Representative example: When you spend £1,200 at a purchase rate of 34.91% p.a. (variable), your representative APR will be 34.9% APR (variable).
american express platinum cashbackAmerican Express Platinum Cashback5% cash back for 3 months (up to £2,500 spend), then up to 1.25%
Representative example: When you spend £1,200 at a purchase rate of 22.9% p.a. (variable), with a £25 annual fee, your representative APR will be 28.2% APR (variable).
natwest reward credit cardNatWest Reward Credit CardUp to 1% cashback on all spending
Representative example: When you spend £1,200 at a purchase rate of 18.9% p.a. (variable), with a £24 annual fee, your representative APR will be 23.7% APR (variable).

Where do you spend?

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

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

However, people who spend most of their money on groceries, petrol and clothes (who doesn't?) could consider cards that offer variable cash back rates on those specific types of goods.

Although earning power appears to be potentially limited, cash back rates are generally higher which can more than make up the difference.

Of course, the nature of the restrictions on shops will determine how far cardholders can really benefit.

For example, Santander's cash back card, shown above, uses Mastercard retailer codes to determine which stores will earn cash back, which means that almost all stores earn.

On the other hand, the now defunct Barclaycard Freedom scheme really suffered from a lack of willing retailers.

Another limit to cash back might be not that the shop doesn't give you the chance to earn but that the shop doesn't give you the chance to spend.

There aren't a huge number of retailers who don't accept American Express, for example, but if one of those few retailers happens to be your favourite store it could mean a big dent in earnings.

Find out more on American Express' acceptance problem in this guide.

Tiered or flat rate cash back?

This is where it gets a little bit like revisiting your maths GCSE or watching 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!).

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 percentage applied across the board, tiered schemes work instead by awarding different percentage 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 better off with a tiered or flat rate cash back credit card.

So, for example, you might come across a card that earns like this:

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:
£250 £15 £37.50
£1000 £94.98 £150

It's also worth noting that, tiered or flat, it's not uncommon for cash back deals to have earnings caps.

These limits are generally seen on introductory bonuses but are applicable to annual spend too so this is something high spenders should look out for.

How much will bonuses make?

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, some cards have previously offered a high cash back rate of 5% during the cardholder's first 3 months: a bonus that could translate into hundreds of pounds.

However, be aware that most of these deals come with strict limits on how much customers can earn.

With high spend it's also worth looking out for cards with 0% purchase periods to spread the cost of spending.

It's also worth being aware that some cards offer bonus rates annually, not just in the first blush.

For example, a deal might allow cardholders to earn double cash back during their 'anniversary' month.

Again, though, the bonus will often be subject to earning limits and may only be extended to those who have spent over a certain amount - aren't credit card providers romantic on their anniversaries?

Can you really avoid interest?

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 (list of defined transactions) not earn you cash back they will lose you money because alongside a percentage fee for the transaction, they generally aren't included in the interest free period either 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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