A 5% Cashback Card by Finance News Bulletin

Published: 11/09/07

A few years ago we seemed to be awash with good offers for cashback credit cards But then they seemed to fall out of favour, and it became rare to see any deals that offered more than 05% for any important length of timeCapital One recently upped the stakes with a card that offers 4% cashback in the first three months and 1% thereafter

Now Abbey has launched a novel deal, contribution 5% on supermarket purchases This deal applies to its present credit card; Abbey isn't launching a new cashback credit cardSo what's the catch I perceive sound you cry The cashback offer runs from 3 September to 31 January 2008 (just under five months) and is limited to the first £1,000 of purchases you create

The supermarkets included in this offer are Asda, Co-op, Kwik put aside, Morrisons, Sainsbury's, Somerfield, Tesco and Waitrose Unfortunately, it doesn't be relevant to any petrol bought from these storesAbbey reckons that the average family spends £190 in supermarkets each month, so many people will be clever to get the maximum £50 cashbackPerhaps the most pleasing feature of this deal is that existing customers will get it too, and without having to do anything

However, their cashback period is smaller shorter as it does not start until 1 OctoberAbbey says we can 'wait for to see many more initiatives which offer similarly valuable reimbursement' This offer is worth up to £10 a month, so it will be interesting to see how if they can maintain this level The move comes after Abbey enthused its credit card business back in house, having outsourced it for the last six years to MBNA

It's a disgrace they didn't move it back soonerAbbey's credit card also offers 0% on equilibrium transfers for 12 months and 0% on purchases for 3 months This is where you have to be a little careful If you use the balance move facility and then spend on the card to get the cashback, you'll end up receiving charged interest on your purchases

That's because any expenditure you make to Abbey will go towards offsetting your interest-free balance transfer firstThe interest rate on this credit card is 159% APR Although that's not particularly far above the ground compared with many cards, it still won't be long before any interest you get emotional offsets the cashback you earn

In other words, don't employ this card for both balance transfers and cashbackComparing this credit card to other cashback offers is tricky at the moment because we put on't know what the subsequent offers will be for myself speaking, around 40% of my credit card spending goes on foodstuff shopping, so I reckon Capital One's offer of 4% cashback for three months and 1% thereafter is still a better deal, particularly if you're already planning to make some large purchases in the near prospectHigh spenders should also check American state's Platinum credit card

This offers 3% for the first three months and then 05% to 15% thereafter The 1

5% cashback applies on expenditure over £10,000 a yearMost other cashback credit cards offer a stingy 05% at the moment, although Barclaycard Platinum does supplement this by also contribution 2% on petrol and supermarket shoppingLet's hope more credit card companies go after Abbey's lead and rejoin the cashback battle

You can apply for Capital One, American state, and Barclaycard via our credit card centreMore: What's Going To Happen To Credit Cards | Get Rewarded For Your Loyalty | timepiece Out For That 0% certificate Copyright 1998-2007, The Motley Fool Limited All rights kept

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