The best ways to get cashback

Posted by admin at Jan 14, 2010 | No Comments »

You’d think the concept of ‘free money’ would have consumers falling over themselves to find out more.

In fact, many people still don’t know very much about getting free dosh – in the form of cashback. For example, in a recent survey of readers, 33% of those quizzed said they hadn’t even heard of cashback websites.

Here, I’m going to highlight some of the best ways to get cashback, and explain what they’re about. It isn’t a complicated business once you understand the basics, and it could make you hundreds of pounds better off!

Cashback credit cards

Cashback credit cards allow you to earn money back every time you use them. Here are two of the best ones currently around:

American Express Platinum Cashback card: This offers a very high initial level of cashback: 5% on all purchases, for the first three months, up to £100. Thereafter, you’ll get 0.5% cashback on the first £3,500 of spend, 1% from £3,501 to £7,500, and 1.25% from £7,501 upwards.

The card has a typical APR of 19.9%. The main downsides are that you’ll need to earn at least £30,000 a year to apply for it, and that you’ll have to spend at least £3,000 per year on it, or it won’t pay you any cashback at all. It’s also worth bearing in mind that American Express still isn’t accepted everywhere.

The Egg Money World MasterCard: This card offers a flat 1% cashback on all spending, up to £200 per year. It has a typical APR of 17.8%.

On the downside, it charges a flat fee of £1 per month. That means you’ll need to spend at least £1,200 each year – just to break even. And you’ll need to spend a minimum of £500 a year to qualify for any cashback.

To find out more about which cashback card is right for you, read Top reward and cashback cards.

A friend of mine used cashback credit cards to earn over £200 last year. However, they’re not for everyone. For one thing, you’ll need a very good credit rating to have any chance of your application being accepted.

And you’ll also need to be absolutely sure that you can clear the balance, in full, every month. If you don’t, the interest you’re charged will almost certainly outweigh any cashback benefits.

But don’t worry. If you’re not willing or able to take out one of these cards, there are still some great cashback options on offer.

Cashback websites

In a nutshell, cashback sites are websites that set up affiliate relationships with certain retailers or service providers. When you make a purchase via one of these sites, that site earns money from the retailer concerned, and passes some or all of it on to you.

Popular, well-established cashback sites in the UK include TopCashback, Rpoints, GreasyPalm and Quidco (which was recently voted the best cashback website by readers).

None of the items or products you purchase will cost more because you’re buying them through a cashback site. However, there are variations between the sites on offer. For example, each will be affiliated to a slightly different group of retailers; and some keep a percentage of your cashback as an annual charge, whilst others are free to use.

The best way to use these sites is in conjunction with price comparison sites like Kelkoo and PriceRunner. Use the price comparison sites to find the product or service you want at the lowest possible price.

Then hunt around for a cashback site that has a relationship with that retailer, and buy the product via that site.

Remember that you can use cashback sites for more than high street goods. For example, some sites give money back on home phone deals, WeightWatchers membership, breakdown cover and insurance packages.

It’s really a matter of doing your research and having a nose around. To find out more about cashback sites, read The best way to shop online.

Current accounts

At the moment, certain current accounts are offering customers the chance to earn cashback when they sign up for them.

This can be a great deal – but only if the account is right for you in other respects, too. For example, are you looking for a good in-credit interest rate, or is an interest-free overdraft more important to you?

Signing up to an account purely for £100 incentive is a mistake: an inappropriate account is likely to lead you into financial trouble which more than cancels out that cashback gain.

That said, here are some accounts offering decent cashback incentives:

Alliance & Leicester Premier Current Account: Alliance & Leicester has just announced the return of its £100 cash incentive for this account. To qualify, you’ll need to transfer all your direct debits across, and pay at least £500 (from a non-Alliance & Leicester account) into the account in the first 11 weeks.

This account offers a 0% overdraft for 12 months (up to £2,500). You’ll then pay 50p per day on any overdraft, capped at £5 per month. The in-credit interest rate is 0.5% AER up to £2,500, and 0.1% AER on anything over that.

First Direct 1st account: This account will pay new First Direct customers £100 for joining, and another £100 if they decide to switch accounts again within a year. To get the first £100, you’ll need to deposit at least £1,500 – for at least three months – into the account.

Just bear in mind that you’ll need to keep up with this level of monthly deposit to make the account worthwhile. If you miss the minimum deposit of £1,500 – but keep the account open – you’ll be charged a £10 monthly fee.

The 1st account does not pay any in-credit interest. It offers an interest-free overdraft up to £250, but you’ll pay 15.9% APR on anything over that.

Halifax Reward Current Account: My last pick is a current account that gives cashback in a slightly different way. The Reward Current Account gives you £5 (after tax) for every month you pay in at least £1,000. The actual balance in your account doesn’t need to be £1,000+ – so you’ll still get your £5 if you’re overdrawn.

However, if you go overdrawn regularly, this is NOT the account for you. The account doesn’t charge interest on overdrafts; instead, you’ll be charged a flat £1 per day, and £2 per day if your overdraft is over £2,500. Unarranged overdrafts are charged at a whopping £5 per day.

To find out more about current accounts read The top 10 current accounts for 2010.

Get help from

If you want to make some extra cash, you’ve come to the right place.

First, adopt this goal: Make some extra money

Next, watch this video: Cash in on cashback websites

And finally, why not have a wander over to Q&A and ask other members for hints and tips about what worked best for them?

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