Tag Archives: cashback

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Maximise Rewards on Your Credit Cards

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Credit card rewards are, at the very least, extremely nice to have. They can also give a genuine boost to your finances or be that factor that makes you choose one provider over another. But you don’t have to just passively accept the rewards as they come. With a little extra effort, you can maximise the rewards in order to draw the very greatest benefits from your card.

Combining With Separate Offers

Get a little extra reward in the first instance by looking at other offers and types of reward that you can combine with your card. For example, it may be possible to make your application through a cashback website. This will give you cash upon your application being accepted, above and separate from whatever rewards may come with the card. It is possible there may also be special offers for taking out a credit card with the bank you already hold a current or savings account with.

Making the Most of Cashback on Spending

Many cards offer rewards in the form of cashback on spending. Often, this reward is only valid for spending up to a certain value or for a certain time after you first take out the card. It is important, therefore, to make the most of this offer by spending the full value if at all possible, and doing so while the cashback offer is still in effect. If you have any big purchases coming up like car insurance renewal and you were planning to pay cash for them, it can instead be worth putting them on your card in order to get cashback. You can then quickly repay the balance with the cash you were going to use for the purchase, and therefore avoid interest.

Gift Vouchers and Material Gifts

If you are given a gift voucher for a shop you do not normally use, then it might be possible to get more benefit out of it than you would from simply going to the shop specifically to use the voucher. It might be possible to turn the voucher into cash that you can spend wherever you like by selling it to somebody who does shop their regularly. Ideally, you will be able to make a deal with a friend or family member to exchange it for its cash value directly. They lose nothing because they shop there anyway, and you gain flexibility in your spending. However, it may even be worth selling it for slightly less than the credit is worth. For example, if a card comes with a £100 M&S gift voucher and you do not normally shop there, it is likely you could do more with £90 or £95 in cash at your normal shopping destinations than you could with the voucher, and you may well find somebody willing to pay this much. There are also companies that buy your vouchers, but they tend to pay disappointing rates.

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Comparing Cashback and Rewards Credit Cards

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The common perception is that most people carry a balance on their card when it comes to credit card usage. However, reality is a bit different. The UK Cards Association reports that 61% of credit card users pay their bill in full each month. Therefore, if you fall in this category, it might be a good idea for you to have a card that will reward you for spending on it.

It is worth exploring the numerous rewards and cashback cards that are available if you really do pay your card off in full each month. In this way, the provider will actually pay you for using your credit card. However, you will need to make a decision whether to go for a card which will help you earn some form of reward points or for a straightforward cashback card.

1Here we will make a quick comparison of some of the leading cashback and reward cards in order for you to see how much you really get back for your spending.

We will make a quick comparison between credit cards and cashback cards. We will use the American Express Platinum Cashback Everyday credit card and the American Express Preferred Rewards Gold charge card. For the purposes of this comparison, the following numbers will be used. , £6,000 is spent on each card for the duration of one year, with £2,000 spent in the first three months and £2,000 of the other £4,000 spent in big supermarket chains and petrol stations over the following nine months.

What you earn from the Platinum Cashback Everyday card is around £100 which is about 5% on up to £2 000 spent in the first three months. For the next £4 000 that are spent, the cashback is earned at 1% which adds £40 more to what you have received.

Now we will see what you get for the same amount of money with the Preferred Rewards Gold card.  It should be noted that the first three months give you an introductory bonus of 20 000 American Express Membership reward points. These points can be easily converted into £100-worth of gift vouchers for a lot of shops and big brands. This means that you have 5% return which is the same as the introductory bonus on the Platinum Cashback Everyday card.

So it might be the case that rewards cards prove to be better than cashback cards in terms of value. Nevertheless, it is worth exploring your options carefully before choosing which one you will go for.