News & Views - Savantor

Cashback card rules confusing?

Friday, 16 September 2011

An old proverb suggests you can’t have your cake and eat it (although I’ve always thought it makes more sense to say you can’t eat your cake and have it!) but in the cashback card world it seems you can’t have your card and understand it. Lovemoney.com recently did some research into this but it still seems like you need a Maths degree to understand the rules. Here’s a sample - American Express recently changed the way that cashback is earned with their card. You now earn 2.5% cashback on everything you spend in the first three months, up to a maximum of £100 cashback (after that, you’ll earn 1.25% on everything you spend). After the first three months the cashback rate drops to 1.25% regardless of how much you spend. Amex will also pay 2.5% cashback every year, during the month following the anniversary of the day you took out the card. So you need to remember the date you took it out. But Amex will also now charge you £25 a year as a fee for using this card. So, after the first year, you need to spend £2,000 every year on your Amex card to break even.

The Capital One World Card pays 5% cashback for the first 99 days, up to a maximum of £100 cashback (so there’s no point spending more than £2,000). After the first 99 days are up, the amount of cashback you earn depends on how much you spend. You earn 0.5% cashback if you spend up to £6,000 a year, 1% cashback on all spend between £6,000 and £9,999 a year and 1.25% cashback on all spend above £9,999 a year. Still keeping up?

The Santander 123 cashback card which recently launched offers 1% cashback on supermarket spending, 2% cashback on department store spending, 3% cashback on petrol (up to a maximum of £9 cashback a month, which is a maximum spend of £300 a month on petrol). This card also has a £24 annual fee. So, just to break even, every month you’d need to spend a minimum of £200 at the supermarket, or £100 at a department store, or £67 on petrol.

And that’s all there is to it.

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