Additional benefits

The Long-Term Benefits

The long-term benefits of getting cash back are numerous. If you’re on top of your card repayments, you’re essentially getting money from the issuer for spending as you would normally. For this reason, it’s best to think about it as interest on your purchases, but going in the opposite direction – the more you spend, the more you’ll get back. Just bear in mind that the phrase “you’ve got to spend money to make money” does indeed apply here; don’t spend a thousand pounds to get twenty pounds back, if you were only willing to spend eight hundred usually.

If you do the maths, you’re losing a good £180 for no real reason other than to get a free bit of money. If your purchases and your cash back would ever cancel each other out, be responsible – free money is a big thing in the recession, and out of it, but you’re still gambling your financial stability on the price of a night out. Spend as much as you would usually, be responsible, and cashback cards could make you a lot of money over the year – on a salary of £24k per annum with outgoings of £20k, you’re looking at £400 over the year – the price of a flight to somewhere nice in Europe, or a new dishwasher. Be careful, and it’ll reward you in the long term.

Air Miles

Air miles are a fantastic reward for anyone who spends responsibly on a regular basis. By building them up over time it’s possible to go for any flight you’ve got the points for, from a cheap flight to Dublin to a first-class weekend trip to New York. Some cards will even offer an introductory bonus, such as getting 1,500 air miles for a £10 spend on a new card – a trip to Paris for two.

Special Insurance

Some cards will also offer types of insurance, in addition to the usual financially-related types such as identity fraud. For example, some cards offer travel insurance – good when using your card abroad, though do consider the fact that this then encourages you to take that particular card with you on holiday, and they may be aiming to make the money on your insurance premium back through you using the card for foreign withdrawals.

Lifestyle Rewards

Some also offer rewards to help you enjoy evenings and days out, from money off restaurant meals to discounts on petrol and shopping trips. These rewards are especially good for anyone who is responsible and on-time with their repayments though bear in mind this may come as a result of having to spend a specified amount on the card that particular month.

Researching and Choosing

This is the important part of selecting a card that goes with your lifestyle. If you’re a house-husband or house-wife, and tend to do the week’s shopping, cards that hold rewards for supermarkets are of course a good idea, as built up points (Nectar Points are a good example of this) can eventually cancel out the cost of a week’s shopping, a saving that can then be put aside or put towards a reward for the entire family. Compiling rewards on different cards is also important – if you can convert them into cash and put them all on the same card, it begins to add up very quickly. If, as we have suggested in other articles, you’re using different accounts for different purposes – from balance transfer rates to base rates of interest – you’ll likely have a range of plastic and thus, a range of different reward schemes to take advantage of. Just remember to be careful, as nothing is ever truly free, and many card companies will attempt to balance out the cost of the rewards by charging users for other things, such as purchases. Of course, if you’re paying fees on purchases, the reward points you get as a result are points you’re effectively paying for in the first place, so keep an eye on the small print when looking at cards with seemingly great rewards.