Cashback dwindles for credit card customers | will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be Scamsmart.

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Published: 26/09/2017

At one time, spending on credit cards was a viable way to earn a decent amount of cashback, yet customers will no doubt have noticed that the returns on offer have become much more scarce in recent years. Indeed, the amount of cashback available has fallen so much that you may need to make sure that the perks still justify keeping the credit card.

Cashback cuts

Our latest research reveals that the number of card providers offering a standard cashback deal has notably fallen over the past five years, while many of those who still offer such a deal have cut their rates significantly.

In 2012, brands including Bank of Ireland UK, Capital One, Creation Financial Services, Halifax, Leeds Building Society and Sainsbury's Bank all had at least one credit card offering a cashback deal. These have since vanished, and as the table below shows, even the best cashback credit cards now offer minimal returns.

Top fee-free cashback cards

Credit Card APR Cashback
American Express Platinum Cashback Everyday 22.9% Intro 5% (£100 cap), std 0.50%-1%
Nationwide BS Select Visa 15.9% Standard 0.50%
First Trust Bank (NI) Visa/MasterCard Option 1 18.9% Standard 0.50%
NewDay Ltd - aqua Reward MasterCard 34.9% Standard 0.50%
Smile Classic Visa 16.9% Standard 0.25%

"There seems to be no end in the cull to rewards for credit card customers," said Rachel Springall, finance expert at "Last week MBNA joined the ranks
of providers who've pull their cashback deal for existing customers, in what has become a progressively shrinking market. The most common cashback return today is 0.50% for everyday spending, which equates to just 50p for every £100 spent."

Dwindling deals

There are still some decent introductory deals around, but just make sure you check the terms and conditions. For example, American Express offers cashback of 5% for three months on its Platinum Cashback Everyday Card, but this is a short-term offer that also caps the cashback available at £100 over that period. You'd also need to spend £3,000 each year to qualify for cashback, which after the introductory deal ends reverts to a standard rate of between 0.50% and 1% depending on the amount spent.

However, this deal still beats many of its rivals, with only American Express' fee-paying version able to offer higher rates. Indeed, there are other cards out there that may seem appealing, like the ASDA cashback card, but as Rachel points out, "the maximum returns are only available on eligible spends and any gains would need to be converted into supermarket vouchers".

Another alternative could be the NatWest Reward Credit Card where up to 1% can be gained, but again, this return is only for spends in supermarkets, and non-current account customers would need to pay an annual fee of £24 each year for the privilege. Other alternatives include TSB, with its current account customers eligible for a credit card that pays 1% cashback, capped at £5 per month.

What's happened to the market?

Much of the decline in the cashback market can be attributed to an EU ruling in 2015, which effectively capped the amount banks could earn from card transactions. The interchange fee – the fee providers charge retailers for accepting their cards – was capped at 0.3% for credit cards and 0.2% for debit cards, well below the 0.8% fee that was previously commonplace, and providers looked for ways to claw back some of their lost income as a result.

"Since the EU interchange fee cap ruling in 2015, cards offering cashback have dwindled, as providers assessed how they could possibly recoup their costs," explained Rachel. "One of the ways they could still offer a cashback deal would be to introduce a card fee, but instead they either pulled the offers or limited the rewards.

"It's also becoming more common for shoppers to find that any gains from their spending are being shoehorned into vouchers with specific brands. This limits their appeal and customers could well forget to spend the vouchers, which is why straightforward cashback is much more desirable.

"Customers will need to work harder to earn something for nothing on a cashback credit card, and one of the ways to maximise returns could be to use the plastic for everyday spending and then pay off the balance each week. This way, customers can avoid being hit by interest charges that will eat into any accrued cashback."

What next?

Compare the best cashback credit cards to make the most of your everyday spending – but just make sure you can pay the balance off on a regular basis


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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