'My cashback credit card is closing, what are the best accounts available?'
I am a customer with Tandem Bank. My cashback credit card, which is currently free, is about to be discontinued and replaced by a card costing £5.99 a month. What other options do I have?
DC, via email
Digital bank Tandem announced earlier this month that it plans to start charging for its popular cashback credit card.
It is the latest blow to consumers trying to earn while they spend, who have seen cashback offers and rewards schemes scaled back in recent years.
A handful of cards remain available to shoppers, but many of these now charge an annual or monthly fee. For example, the Santander All in One account offers 0.5pc cashback on all spending but users must pay £3 a month for the card.
If you’re looking for a fee-free option, the NatWest and Royal Bank of Scotland Reward Black accounts offer between 0.5pc and 1pc cashback on spending, although you must have a linked current account to take out the card.
The other options to consider are the Aqua Reward account, which is fee-free and offers 0.5pc cashback on all spending. However, earnings are limited to £100 a year.
The Barclaycard Rewards account offers a lower 0.25pc cashback rate but earnings are unlimited.
Also worth considering is the American Express Platinum Cashback card. This offers 5pc cashback, but only for the first three months, capped at a total of £125.
Account holders will get between 1pc and 1.25pc cashback thereafter. Card holders who spend up to £10,000 after the first three months will earn 1pc. Spend £10,001 or more and the cashback rises to 1.25pc.
However, Katie Brain of Defaqto, the financial analyst, warned that users should pay their balance off each month to avoid high charges.
“Cashback cards are great for people who can clear the balance every month and don’t leave debt on the card long enough to pay interest," she said.
“Typically, people who use a credit card for work expenses that are refunded quickly, can benefit from this type of card as they get a cashback from the card provider without paying any interest.”
