Cash Back Credit Cards

How to use a cash back credit card...

Cash back credit cards can replace your debit card as your number 1 spending tool. The more you spend the more you make.

Get in the habit of using your credit card for everything you buy to maximise its potential as a money-spinning tool. Just make sure that you pay back on time, or your free money will cost you dearly!

Making the most of your card

- How much do you spend?
How much you spend will be the main factor that governs your card choice. Different cards are geared to different spending habits. Look at how much you currently spend on your debit card and work out how much of that could be spent on a cash back credit card, then you can choose the best cash back credit card for you.

- Why not use my debit card instead?
Using a cash back credit card instead of your debit card can earn you free money. If you set up a direct debit to repay the full balance each month, you won't notice too much difference from using your debit card. Plus, you'll also have the added consumer security of using a credit card.

- Make the most from introductory bonuses
If you are looking to take out a new credit card for the benefits of cash back you can often find cash back credit cards offering introductory bonuses to new cardholders - doubling or even tripling the cash back awarded during this introductory period.

If you have any large purchases to make soon, try and take out a cash back credit card just before you need to splash out - this way you'll earn cash back at the higher introductory rate on your expensive purchase, and still have the majority of the introductory bonus period to make good use of.

Things to watch out for

- Budget your income
With all the extra spending you'll be doing on credit remember to budget your income so that you can repay your cash back credit card balance in full each month - and if you've set up a direct debit, make sure the money is available in your current account.

- Set up your direct debit
Don't forget the direct debit! This can't be emphasized enough, yet many companies will conveniently neglect to supply you with a form to set up a Direct Debit. Get it set up before the first payment is due.

- Cash advances
Cash advances won't earn you cash back and they are usually subject to handling fees and higher interest charges - if you can, always use your debit card at the ATM machine.

Remember, cash advances don't just include ATM machine withdrawals, they also cover getting 'cash back' at the supermarket, buying foreign currency or traveller's cheques and can also include gambling transactions as well.

Compare cash back credit cards