Cashback credit cards are being taken out by more and more customers according to a report published by financial research group Defaqto. The report states that the number of credit cards available on the market today that offer cash back incentives has doubled since October 2010, when there were only 11 options available to consumers that wanted the feature.
12 of the 22 cards that can be taken out right now would only reward customers who spend £1,000 per month with about £100 per year or less – with some of the less enticing cards paying as little as £30 for that amount of outlay.
The report suggested that to make the cards worth it there would have to be a large amount of money going through them each month, which means that they are more likely to appeal to higher spenders. Despite this, research indicates that consumers consider cashback incentives to be the third most important thing they look for in a card.
Will Becker from TotallyMoney.com said: “Cashback cards are rightly taking a greater market share. We think pretty much everyone would benefit from moving their spending from debit cards and other credit cards to cashback credit cards. To us it seems crazy that only 20% of spend on plastic in the UK is on credit cards, and only a fraction of that is on cashback cards when the average UK household could be earning more than £800 a year in cashback. Of course, for all cashback cards it’s vital to follow number one cashback rule of only spending normally and always repaying in full. If you don’t, interest quickly swallows up all the cashback and more.”
Cash rewards on these cards comes in a number of forms; from air miles to vouchers for department stores, and with some cards paying out £350 each year for a £1,000 a month spend, that can really go a long way.