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Shopping without the perks: cashback credit card offers culled

Written by: Paloma Kubiak
Gone are the days of generous cashback credit card and reward offerings as research reveals providers have scaled back their perks.

Shoppers have benefited from getting a little back on their everyday spending with the help of certain credit cards.

But, now it seems that consumers are getting much less back when spending on plastic.

In some cases, 0.50% is the most cashback shoppers will get as standard without paying a fee. This equates to just 50p per £100 spent.

Points and reward cards have also been scaled back in recent years, according to data site, Moneyfacts which means loyalty doesn’t seem to be paying off.

For instance, Debenhams and House of Fraser pay three points for every £1 spent in store, but elsewhere customers receive one point on every £2 spend. Therefore, customers would need to spend £1,000 to qualify for 500 points to get a miserly £5 voucher.

One reason suggested for the disappearance of perks is due to the shake-up of the credit card market in 2015 when the EU interchange fee cap ruling was implemented.

At its core, the fee cap was to save consumers money by limiting the transaction fee for using their card. But as a consequence, providers have limited their reward offerings.

Rachel Springall, finance expert at Moneyfacts, said: “The EU interchange fee cap ruling was supposed to set a positive change in the credit card market in motion, but it has been a bit of a double-edged sword. Card providers have been pulling back their generosity for offering rewards or cashback to recoup costs, so now there are very few deals around.

“Some good changes have been introduced since January 2018; the ban on online surcharges when using a credit card or debit card means, for example, the removal of what would have been a 2% fee to book a flight. However, this ban may inflate the cost of a holiday overall, as companies will need to recoup this loss.”

Springall added that if consumers are using a credit card to earn some rewards or cashback, then they should ensure they repay their balance each month to avoid incurring interest.

She said: “One free way for shoppers to build up points to spend in their favourite stores would be to sign up for a loyalty points card. It is worth the effort to sign up for these cards, particularly for stores or coffee shops they visit frequently. If customers don’t like the idea of holding multiple cards, then they could download the Stocard app – it’s completely free and can easily be scanned at the point of purchase.

“Clearly, consumers need to keep their eyes peeled for any new offers, and be quick if they want to take advantage of rewards and cashback.”

Top cashback credit cards and points cards

Below are Moneyfacts’ top picks for cashback credit cards and points cards:


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