Cashback or rewards card

SparciaM

I have an Amazon CC which gives you Amazon points, but I rarely use now and looking to get rid of.

I use my Lloyds Airmiles Amex card every month and clear every month. But I'm wondering what is better a cashback card or a rewards card? I usually spend a max of £500 and a min of £150 on my CC every month.

So what do people prefer, cashback or rewards!??!

mupegasus

Preferable cashback!

emma396

cashback! or marks and spencer vouchers.

Purple_Peril

Cash - then I can spend it where I want to (or not spend it, as the case may be)!

CannyJock

I think you count it as 1% saving on a cashback card.

Personally, I prefer to use a 0% purchase card with a decent credit limit
(HSBC at the moment) and keep my own money in an account earning 4.88% after tax, repaying the minimum each month.

I make it £60 cashback on a £500 per month spend and £ 144.43 on £500 a month earning 4.88% and assuming a 3% minimum repayment.

lisyloo

So what do people prefer, cashback or rewards!??!

Definitely cashback.
With cash there is a 100% chance of it being used.

With rewards there is a chance of not being able to use it or a while (until you've accumulated enough) and definitely the prospect of having a residue left over.
You have to factor that in.
There's also a chance of not being able to use it at all.
I have some airmiles but a lot of the time I find Easyjet flights cheaper than the tax and charges on a FREE airmiles flight, so make sure you factor in the usefulness of rewards when you consider what to choose.

missile

Amex and Capital1 had 3 month introductory cash back @ 5 and 4% respectively. I believe these offers are no longer available? Capital1 1% cash back is paid in January and if you close the account before then you get zip.

Example1: By saving the cash you would have spent on purchases using your cash back card in month1 and as long as you pay back balance when the statement arrives in month2 you pay no interest or fees. Thus if you save this cash in an ISA you can generate tax free 6%+ on the equivalent of your rolling monthly CC balance.

Example2: By saving the cash you would have spent on purchases using your 0% on purchases card in month1 and as long as you pay back the minimum when the statement arrives in month2 you pay no interest or fees. Similarly cash you would have used for purchases in month2 can be saved. If you save all the cash in an ISA you can generate tax free 6%+ on the total card balance.

PS: As we all know, the amount you can save each year in a cash ISA is limited. If you are so inclined more money could be invested into a stocks and shares ISA see http://news.bbc.co.uk/1/hi/business/6475891.stm

lisyloo

The capital one deal has finished.
I believe the Amex deal is still running (just checked the website) and it's 5% for the first 3 months up to £4000 (£200 cashback) then it's tiered.

There are some problems with using Amex which are
1) Not accepted by all retailers so you need to run a visa/mastercard account as well.
2) Higher charges than visa/mastercard where charges for using a credit card are made.
3) Paypal is charged in dollars so there is a currency conversion fee.

During the initial period then any fees can of course be offset against the cashback providing they are less than 5%.

I am thinking of getting one myself but it's worth being aware of the issues about and the limit.

missile

Here is the link to what they claim to be top ten cashback cards> http://www.about-credit-cards.co.uk/cashback-credit-cards.htm?source=ggst&cat=194975930&tpage=cashback-credit-cards&tkeyword=_cash+back+credit+card_
Here is the link to Amex deal> http://www.americanexpress.com/campaigns/affiliates/uk/platinumcredit/platinumcredit.cgi?PID=832&BUID=CCG&PSKU=D7X&AFFID=GoogleGL&CRTV=1561&sourcecode=X70033PL33
Here is the link to Capital1> http://www.capitalone.co.uk//creditcards/cards.jsf

I do not like Amex. My wife and I both have Capital1 cards in our plastic collection. I received £407.38 cashback in January.

JohalaReewi

CannyJock has the right idea if you feel you can execute the plan (and have a high enough credit limit). You will get far more cashback if you don't pay the CC company and invest the payments yourself. Also, it is real cash in your pocket, niot money off your next bill.

The only real problem with an Amex card is it isn't always accepted so as Lisyloo said, have a visa/mastercard as a backup. If you do that, then Lisyloo's problems 2 and 3 get sorted as well. Lots of places do take Amex (supermarkets, hotels, petrol, trains) so it is easy to run up a nice big bill especially if you travel and feed a large family. Also, the CS is UK based and is a normal phone number.

SparciaM

The cash back goes back onto the card right?!?

So do you then transfer that amount from your c/a to a savings account so that you have the cash?! What I mean is, if you get say £20cash back a month added to the card, then that just gets taken off your bill so you don't actually see the cash, you just have less to pay off that month.

Or am I thinking it a wrong way?