The five cashback credit cards

There are five cashback cards currently available for new applications. Neil Faulkner rounds up the pros and cons of each.

I'm glad sometimes that banks don't learn much from their businesses and competitors overseas. I've lived in Germany and over there, credit-card offers are even more complicated than here. Complicated means harder to compare and find the best deal.

For example, on top of a variety of deals similar to ours, German lenders have a wider variety of cashback offers. One offer is 50 cents cashback for purchases over €20, and another offers a 1% cashback card but comes with a €25 annual fee. Those would be make the task of comparing cashback cards here even more tedious.

I've helped you out today. Here are the five cashback cards currently taking new applications in the UK:

The five cashback credit cards

Card name	Cashback offer	Cash on £2k annual spend*	Cash on £5k annual spend*	Cash on £10k annual spend*
Amex Cashback Card	5% on 1st £2,000 of spend in the 1st 3 months and then: 0.5% on total yearly spending up to £3,500; 1% on spending above £3,500 to £10,000; 1.5% on spending above £10,000.	£33	£89	£173
Shell MasterCard	3% cashback on Shell fuel purchases**; 1% on all other purchases.	£20	£50	£100
Smile Classic Card	0.5% on everything.	£10	£25	£50
Bank of Ireland MoneyBack Card	0.5% up to total annual spend of £15,000.	£10	£25	£50
Barclaycard OnePulse with Cashback	5% on Transport for London spending up to £300pm (£15pm cashback); 0.5% on all other spending up to £3,000pm (£15pm). Max possible cashback £30pm. All cashback deals end 31/12/09.	£10	£15	£15

*This is in the first year, assuming spending is split equally over 12 months and that you don't use the card for any special deals (e.g. you don't buy Shell fuel with the Shell card).

**3% on fuel in Great Britain only. In Shell stations outside Great Britain you get 1% cashback on its fuel.

I'm happy that I've dug around and found every cashback card that is currently accepting applications, but let us know if you think I've missed one: feedback@lovemoney.com.

If you think some cards are missing, that's likely because many disguise themselves as cashback cards when really they're reward cards: you're forced to spend the cash you earn in their shops, but I prefer to take the cash and spend it somewhere cheaper!

My favourites

My number one favourite card is the Shell one, as it's a keeper paying 1% flat. Shell used to have an annual limit on cashback, but new applicants aren't subject to that. You also get 3% when you buy fuel at Shell, but don't just do that because of the extra cashback; ensure you look at competitors for cheaper fuel. (Use Petrolprices, for example.)

Still, the Amex Cashback Card will probably kick Shell's butt in the first year unless you buy a lot of petrol at Shell. It pays 5% in the first three months (up to a £2,000 limit), which means you could earn a maximum of £100 cashback in the first quarter.

After that, it pays a confusing but not uncompetitive tiered rate, depending on how much you spend in total over the entire year:

Total yearly spend	Rate of cashback
£3,500	0.5%
£3,501 to £10,000	1%
£10,001 or more	1.5%

So, in year two and beyond you need to spend more than £3,500 a year to earn the same rate of cashback as the Shell card. On the other hand, if you spend more than £10,000 a year, you'll earn an even better rate - 1.5%.

So it's still a great card for anyone who's about to make a large purchase or is year-round big spender. Just bear in mind that Amex is not accepted everywhere.

Smile is my next favourite with a simple 0.5% on all spending. Bank of Ireland pays the same rate, 0.5%, but imposes a maximum limit on the amount of cashback you can earn (£75 a year), so be careful.

Meanwhile, Barclaycard's offer is interesting if your spending is roughly £6,000 or less and you use London transport a lot (perhaps £1,000 TfL spend per year). If you only spend £2,000 a year and half of that is Oyster then you'll get £55, which beats Amex. On the very large downside, you'll earn no further cashback from the start of next year.

One final tip: if you don't pay off your credit card in full each month you'll pay a lot more in interest than you'll earn in cashback.

So avoid all cashback cards unless you can afford to pay off your bill in full every month.

> Read Egg cracks up with 0% rise and Barclaycard slashes interest rates.

> Compare credit card deals at lovemoney.com

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