The number of credit cards offering cashback as a reward has doubled in the past two years, according to a report by financial research group Defaqto.
Although only 9% of the 245 different credit cards of the market featured cashback rewards, as opposed to 10% for air miles and a higher 20% for point schemes and shopping rewards, cashback is the only reward that has seen an increase since 2010, according to the report.
Cashback features on 22 cards, with amounts varying between £1.10 and £36 for every £100 spent on the card each month.
However, the report added that customers “would need to spend well in excess of £1,000 per month” to make the card worthwhile.
Recent research from uSwitch revealed that by opting for cashback credit cards, over ‘bog standard’ credit cards, consumers could save as much as £100 on an average spend of £4,520.
Analysing how much cashback consumers could earn on a spend of £500 a month in the first year, after the card’s annual fee was paid, Barclaycard Cashback Card topped the tables at £156 a year.
This was followed by American Express Platinum Cashback Everyday (£110), American Express Platinum Cashback Credit Card (£106), and Sainsbury’s Cashback Credit Card (£105).
However, Defaqto has urged customers to be mindful of the terms and conditions attached to cashback cards.
“Some cards offer a percentage cashback of your annual spend, which can be a good bonus for credit card use. Beware though, as there may be strings attached, such as the cashback amount only applying to purchases at specific retailers or types of retailer,” it said.
“Often the amount you can earn in cashback is capped, and in recent years card issuers have been reducing or withdrawing cashback credit cards altogether.”