Want To Get An Income For Shopping? We Show You How

Cashback credit cards offer you a double benefit when you are out and about flexing the plastic – you get paid to shop, and you get legal protection while you do it too.

Don’t be caught out though, if you are paying more in interest than you are getting in rewards, these cards cost you money. You are then just playing into the hands of the credit card companies.

If you can afford to pay off your bill each month before interest, then it doesn’t matter whether you are on the high street or the superhighway, you can get money back for splashing the cash. Hundreds of pounds a year can be earned by choosing the right card but there are pitfalls to watch for. So here are some top tips on getting the most out of cashback:

1. 1. Check the deal carefully

You need to choose a card that will reward you in the way you want. American Express Platinum is the highest paying cashback card right now, is giving you £5 on every £100 you spend for the first three months. The most you can get back is £100, and after the three months the cashback is tiered up to 1.25 per cent. There is no limit on what you can earn after that.

If you are a frequent traveller, then the British Airways American Express Credit Card will give you a bonus of 1,000 BA Miles if you spend £500 within the first three months. These are just two examples, so you need to work out which would give you the biggest benefit before signing up.

Some of the cards, such as the Halifax All in One Card, is at 0 per cent interest for 9 months on balance transfers and purchases, so you could use this to really boost your earnings if you wanted.

By using this card for general spending, paying off the minimum on the card and then putting the cash you would have spent into a high interest account instead, you are making more money on your spending.

Keep that to pay off the bill before the 0 per cent deal ends though, otherwise the interest will build up significantly.

1. 2. Make sure you can always pay off your spending before being charged interest

This is vital, otherwise you are costing yourself money rather than earning it. Spending money on your card to get rewards or cashback is a false economy. You would probably end up paying more in interest on a card debt than you would gain in rewards, so ultimately you would lose out.

1. 3. Watch out for pitfalls

While the Amex Platinum is a winner if you qualify, there are plenty of hoops to go through. You have to be earning at least £30,000 a year, have no history of bad debt, and you have to spend more than £3,000 a year on the card. If not, you have to pay Amex £20 for the privilege of having it.

The AA Credit Card is a great option for anyone spending regularly on fuel or motoring costs, as it offers two points for every £1 spent on motoring goods, but half that for all other spending. So if you hardly ever buy anything car related, you should choose a card that offers rewards for something you need and want to be paying for.

4. Get  a joint card

Living with a partner or spouse? If you trust them, then double your benefits by getting a joint card that you can both spend on. The more you spend on the card, the more you get back, so make it work as hard as you can.

If there is a short-term deal offering a bigger benefit, like on the BA Credit Card or the BMI American Express Card from MBNA then you can always get one partner to apply for the card with the other as a second card holder, and then reverse the process when the deal term is finished on the first card – assuming it still applies – so you get double bubble.

After that, use the one card for both to spend on to maximise the reward.

5. Use the card for all your spending

To get the most out of the cashback or rewards scheme, use the card for all your spending. You will maximise your cash rewards, and get legal protection on all of the goods and services you buy.

Under Section 75 of the Consumer Credit Act 1974, if you buy something on the high street,  online or even abroad with a credit card and something goes wrong, the card issuer is jointly liable with the company that sold you the goods or service to put things right.

You have to buy something worth more than £100 and it does not matter where you buy it from. If you buy some clothes from an internet store overseas and they do not turn up, or your airline goes bust before your holiday, you can claim for the loss against your credit card provider.

You do not get this protection on a debit card, or by paying with cash or cheque, so think before you spend.