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24 September 2007
According to recent reports there could be good news ahead for UK consumers that are after impressive cash back rates on credit cards.
Recently the Abbey announced that it was launching a five percent cash back deal on its credit cards, where customers could earn an impressive five percent on the first thousand pounds when making purchases at any major supermarket. This gave the customer the potential to earn up to fifty pounds cash back based on the one thousand pound spend.
As many experts predicted, and as some Abbey officials had also predicted, this seems to have sparked something of a war amidst cash back credit card providers, and since the Abbey made its announcement Capital One has started running its glossy television advertise, which offers customers 4% cash back on purchases for three months. Although the cash back is not as high as with Abbey there is no restriction with regards to where the card can be used in order to get the higher level of cash back.
The typical cash back rate on these credit cards is between 0.5% and 1%, making these four and five percent cash back deals impressive and potentially lucrative for customers. However, experts are reminding consumers that in order to fully benefit from these cash back cards it is important to clear your balance in full within the interest free period, otherwise any cash back is counteracted by the interest that has to be paid on the balance of the card.
Many predict that it will only be a matter of time before the other major credit card providers start revamping their cash back cards, offering higher rates and more tempting deals in a bid to try and entice customers, particularly in the run up to the Christmas season when many people will be applying for credit cards, and many could be tempted by the potential to earn impressive cash back levels on their Christmas spend.
Consumers are also reminded to look at the other benefits as well as the cash back level, such as additional interest free periods offered on purchases or balance transfers as well as the standard variable interest rate in the event that there may be a balance left on the card at the end of the interest free period.
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