One of the most popular rewards based credit cards has been the cash back credit card, where cardholders can earn a percentage back for every pound that they spend on their credit card in the form of purchases.

However, whilst cash back credit cards have proven very popular amongst consumers there is evidence to suggest that the number of cash back credit cards on the market has been declining, giving consumers far less choice when it comes to finding a suitable cash back credit card.

Moreover, industry experts have now claimed that not only has the number of cash back credit cards already declined over recent years but these cards are set to decline further and could soon become very few and far between.

Figures have shown that fewer than one in twenty credit cards now offer cash back facilities for consumers, whereas just six years ago there were around 25 percent of credit cards that offered cash back facilities.

One industry expert said that cash back deals could often work out the most expensive for providers, and with many still trying to repair the damage caused by the credit crisis and the recession providers may start cutting back on the expense of cash back credit cards.

He stated: ‘Credit card providers are facing a number of hits on their established income streams and I regard it as inevitable that credit cards on offer will become less attractive as the providers seek to regain the lost income in other ways and also cut back on the cost of reward schemes.’

Cash back credit cards set to become increasingly rare is a post from: Credit Cards Web

Over the past couple of years, since the onset of the global credit crunch, many credit card providers have been cutting back or even stopping the perks that were on offer.

However, with competition becoming tough again in the credit card sector many are now keen to attract new, low risk customers, and in order to do this have been offering a range of benefits that could help to tempt consumers.

Credit cards from the likes of Amazon and Play.com are enabling consumers to qualify for a voucher to spend on the site subject to eligibility requirements, and this will prove useful for those that are looking to buy gifts from these sites for Christmas. Other cards such as those from Ryanair and Flybe, are even offering free flights subject to meeting eligibility requirements.

Consumers that want to benefit from these rewards based credit cards are advised to compare the different cards and deals that are on offer in order to find one that suits them in terms of the rewards or perks offered, and this can easily be done via the Internet or through the use of a comparison site.

However, consumers are also urged to remember that these cards are best suited to those that repay their balance in full each month, as otherwise the interest charged can outweigh the rewards received.

Increase in credit card perks could prove good news for consumers is a post from: Credit Cards Web

Officials have said that in the current financial climate many people are looking to try and earn rewards and cash back, and this has helped to increase the popularity of cash back credit cards for those that can get them.

One industry official recently stated: ‘Cashback cards are always popular, but even more so now that people are looking to make savings. But cashback cards are few and far between so there is little choice for consumers.’

He said that competition is not as tough amongst lenders as it was during the credit boom, and this is due to the credit crunch and tighter credit conditions, which means that consumer have less choice and less chance of getting the cash back card that they want.

However, officials have said that whilst the level of choice and chances of getting a cash back card have been reduced over the past year there are still some good cash back credit card deals on offer for those that have a decent credit rating and are able to access these deals. Customers must ensure that they compare the various cash back cards on offer, looking at things such as the level of cash back that is paid as well as other benefits.

Customers are also urged to bear in mind that these cards are best suited to those that are able to clear their balance in full each month, as otherwise the amount of money paid out by way of interest for spreading repayments will outweigh the amount of money that is earned by way of cash back on purchases.

Cash back credit cards becoming more popular is a post from: Credit Cards Web

However, one credit card provider has caused disappointment by reducing the level of cash back that new cardholders can earn.

Credit card giant, American Express, has changed the cash back policy on its platinum credit card, which is one of its popular credit card types. The credit card pays 5 percent cash back on purchases for the first three months to account holders. In the past the cash back level was capped by American Express at £200. However, the credit card company has now changed the rules so that new customers will have their cash back level capped at just £100.

Officials have said that the 5 percent cash back that is offered by American Express on the platinum card is a good level of cash back given the amount of cash back that is offered on many other similar cards. After the first three months the card offers 0.5 percent cash back on purchases up to the amount of £3,500. This rises to 1 percent cash back on over £3,500 and up to £10,000, and rises again to 1.5 percent cash back on any amount over £10,000.

American Express has recently found itself under fire because of some customers claiming that because it is not as widely accepted as Visa and Mastercard they have sometimes experienced problems using the card. However, American Express officials have denied that there is any problem using the card.

Cash back deal from American Express cut is a post from: Credit Cards Web

Some industry officials have suggested that many of the people that are using their debit cards to make payment for shopping, day to day purchases, and Christmas shopping could actually end up missing out on a significant level of cash back or rewards by failing to use a rewards based or cash back credit card instead. In fact, it is estimated that some people could be losing out on several hundred pounds each year as a result of this.

Research was carried out by American Express with regards to spending habits of consumers when it comes to credit and debit cards, and officials from American Express suggested that many consumers that spend money on their debit card would be better off putting this money aside and then using a rewards or cash back based credit card. The consumer can then use the money put aside to pay the balance on the credit card, thus accruing cash back or rewards without being charged any interest.

One official from American Express said: “Each British household is paying out thousands of pounds a year on debit cards for everyday items such as supermarket shopping and petrol. Simply by changing the way they pay for these items, people could be earning themselves hundreds of pounds of free cash.”

Some could be wasting money by using debit cards instead of credit cards is a post from: Credit Cards Web

Officials have said that consumers who use a debit card on a day to day basis or to pay for items over the festive season could fare better by putting the cash aside, using a cash back credit card, and then repaying the balance in full with the money that they put aside, as they will then earn money back for all purchases that they have made on the card.

A recent survey showed that when it comes to day to day purchases, only 20% of consumers use a credit card, a further 20% use cash, and 40% use debit cards. Officials have said that using a cash back credit card could help some consumers to weather the effects of the credit crunch by allowing them to earn a little money back for what they spend on the card, and providing the balance in cleared within the interest free period no interest will be charged on the debt.

By using their credit cards on a regular basis and on occasions such as Christmas some consumers could make back hundreds of pounds each year in cash back, according to some industry experts. With people now paying far more on shopping and bills than one year ago this extra cash could come in very useful, and is something that many debit card holders are missing out on.

One senior official from American Express stated: “Each British household is paying out thousands of pounds a year on debit cards for everyday items such as supermarket shopping and petrol. Simply by changing the way they pay for these items, people could be earning themselves hundreds of pounds of free cash.”

Could using your debit card be costing you money? is a post from: Credit Cards Web

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.

Impressive cash back deal from Abbey is a post from: Credit Cards Web

The level of cash back offered on these cash back credit cards can vary from one card provider to another, and this is something that you will need to check and compare, as you want the best level of cash back possible. You will earn a specified level of cash back for each pound that you spend on the card – for example, some cards may offer 1% cash back whereas others may offer 2% or more per pounds spent.

You may also find that some cards have special offers, such as earning a higher level of cash back when making purchases from a particular retailer or paying a higher level of cash back for a set period of time.

Although the cash back levels earned are low in terms of percentage the cash back can soon add up. However, to bear in mind that you will only benefit from these cards if you pay your balance off in full each month. If you spread your repayments and have to pay interest on your balance, the interest that you are charged will cost you way more than the cash back you earn. Therefore these credit cards are beneficial only to those that repay their balance each month in full and will therefore not be charged any interest on the card.

Also, remember that you will not earn any cash back for cash withdrawals or transactions made on the card, so these types of transactions should be avoided, as they also incur extra costs as well as interest. Therefore you need to make sure that you only make cash transactions and withdrawals on your in an emergency rather than as standard, otherwise you will not enjoy the benefits of earning cash back, and will have your cash back earnings affected by the charges and interests applied on these transactions.

Dos and don’ts

If you want to benefit from a cash back credit card:

• Do use your card on a regular basis or to make a larger purchase so that you can earn more cash back
• Do repay your balance in full each month so that you are not charged interest on your spending, as otherwise this will counteract any cash back you earn
• Do avoid making cash transactions and withdrawals on the card, as these will incur charges and interest, and will not earn you any cash back
• Don’t spread repayments on the balance and end up paying interest to the card provider

Cash back credit cards – the dos and don’ts is a post from: Credit Cards Web

There is also a 2.5% balance transfer fee, but even with this many customers could benefit financially by transferring their balance, enjoying 13 months of interest free credit, and getting it paid off within the 13 months to ensure that they do not get charged any interest.

In addition to this the Abbey credit card is offering an impressive 5% cash back on purchases made at specified supermarkets, so in addition to avoiding interest charges on their transferred balance customers can earn money on their spending.

However, consumers are being warned that if they have transferred a balance then they should not spend on the card, otherwise the purchase balance will get trapped behind the interest free transferred balance, and will be left to accrue interest. This means that even with 5% cash back at supermarkets you will incur hefty interest charges that will counteract the benefits.

Customers could benefit from the Abbey card if they use the card either to transfer a balance or to make purchases and repay the balance at the end of the month. Customers will not benefit if they do both, as they will otherwise be hit with high interest charges on their purchases whilst their monthly repayments are used to pay off the transferred balance.

There are also a number of other credit cards that are offering long interest free periods on balance transfers. This includes the Barclaycard Platinum, which offers 14 months of interest free credit on balance transfers with a transfer fee of 2.5%, and the Virgin Money card, which offers 15 months of interest free credit on balance transfers with a transfer fee of 2.98%.

Abbey to offer 13 months interest free credit on balance transfers is a post from: Credit Cards Web

However, customers will have to pay a 2.5% transfer fee based on the amount being transferred, which is usual procedure with balance transfer credit cards. In addition to the thirteen months interest free offer, the Abbey card is also offering a very generous 5% cash back deal on purchases made with the card at participating major supermarkets, which means that customers can earn back 50p for every £10 that they spend on the card subject to terms and conditions.

There is a catch to look out for, however. If you are using the card for just balance transfers or for just purchases at major supermarkets then you can benefit from one of the two offers. However, consumers are warned to steer clear of transferring a balance and making purchases on the card. This is because the balance from any purchases made on the card will be trapped behind the transferred balance, and although you will earn cash back on your purchases it will come nowhere near making up for the amount of interest that will be paid on the trapped purchase balance.

In order to benefit from the cash back deal consumers are advised to look at an alternative 0% balance transfer card, such as the Barclaycard Platinum, which offers fourteen months interest free credit, or the Virgin Money card, which offers fifteen months of interest free credit.

Watch out for catch with new Abbey offer is a post from: Credit Cards Web