The Abbey bank has set a challenge to the other leading banks in the UK by offering a credit card that enables consumers to earn 5% cash back as opposed to the 0.5% or 1% that is generally offered on most cash back credit cards. With the new deal both existing and new Abbey credit card customers will be able to benefit.

The cash back level of 5% applies to purchases made in any major UK supermarket up to £1000, which means that customers can earn up to £50 cash back on their next £1000 worth of shopping, which the average household will spend in the space of four or five months.

Cash back credit cards are already very popular amongst credit card users in the UK, and this offer from Abbey is likely to attract many consumers keen to earn some money from their shopping. Those that repay their balance in full each month will benefit most from cash back credit cards, as they will not be hit with interest payments yet will still benefit from earning cash back on their purchases.

According to recent figures the average household spends around £200 per month on supermarket shopping, so many cardholders will be able to earn the full amount of cash back available within around five months.

One industry official stated: ‘Almost all of us will be spending £1,000 at supermarkets between now and the end of January, so an extra £50 will come in very handy. Abbey says this is the first of many credit card offers, so I look forward to seeing what it comes up with for the start of February.’

The Abbey card also enables cardholders to enjoy three months of interest free credit on other purchases, as well as twelve months of interest free credit on balance transfers, making it all the more attractive to customers.