Are the best UK cashback credit cards a good alternative to miles and points cards?

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Cashback credit cards are not a core focus of Head for Points due to, erm, their lack of points.

That isn’t going to change, but as the benefit packages on all reward cards – travel and cashback – continue to be squeezed it is worth keeping an eye on the best alternatives.  After all, you could use the cashback to pay for travel directly or even buy points in your preferred programme.

What about the American Express cashback products?

The best cashback cards come from American Express because these have not been impacted by the 0.3% cap on interchange fees.  With retailers paying more to accept the cards, Amex can pass back more to you.

You can find details of the Platinum Cashback card here and the Platinum Cashback Everyday card here.

The Platinum Cashback card pays you cashback at the following rate:

  • 5% cashback on all your spending in the first three months, up to £2,500 of purchases
  • 1% back if you spend under £10,000 from month 4 to month 12 (and annually thereafter)
  • 1.25% back on your spend over £10,000 from month 4 to month 12 (and annually thereafter)

It comes with a £25 annual fee.  The Platinum Cashback credit card has a representative APR of 28.2% variable, including the £25 fee, based on a notional £1,200 credit limit.  The interest rate on purchases is 22.9% variable.

Meanwhile …..

The Platinum Cashback Everyday card (free) has a tiered reward system:

  • 5% cashback on all your spending in the first three months, up to £2,000 of purchases

After the first three months, you will earn:

  • 0.5% on the first £5,000 of spend (but you get nothing if you spend under £3,000)
  • 1% back on your spend over £5,000

Cashback is paid in a lump sum at the end of each card year.  The card has a representative APR of 22.9% variable.

To save you getting your calculator out, the break-even point for getting the £25 Platinum Cashback card is £10,000 of spending per year.

For everyone except the highest spenders, you are better off with the free Platinum Cashback Everyday card.

American Express Platinum Cashback credit cards review

What are the best Mastercard and Visa cashback products?

Cashback Visa and Mastercard products are not hugely generous following the cap on interchange fees.

0.2% is key figure to bear in mind.  This is generally what you will now get from most cashback (or pseudo cashback) Visa and Mastercards:

Amazon halved the earning rate of its Platinum Mastercard on in April 2019 and now gives 0.5p of Amazon vouchers per £2 spent outside Amazon (ie 0.25%)

ASDA cut the rate on its Cashback Credit Card from 0.5% to 0.2% cashback on non-ASDA spend in 2018 (you receive ASDA vouchers, not actual cash)

The Marks & Spencer credit cards offer 1 M&S point for every £5 you spend outside M&S, with 500 points getting you a £5 M&S shopping voucher for a return of 0.2%

Some cards are even worse.  The Sainsbury’s Bank credit cards give 1 Nectar point, worth 0.5p, for every £5 you spend – a return of just 0.1%!

There are still some good free Visa and Mastercard cashback cards

The main outlier at the moment is the John Lewis and Waitrose Partnership Card.  This gives you 1 point for every £2 you spend outside John Lewis / Waitrose, which earn double.  As 500 points gets you a £5 shopping voucher, this is a return of 0.5%.  Until 29th February there is a £30 voucher for signing up and spending £250 within 90 days.  Representative APR 18.9% variable.

Tandem Bank, the small challenger bank, offers 0.5% cashback and 0% foreign exchange fees on its Visa card.  This is your best option at the moment, although it may not be sustainable since Tandem has basically been using it a loss leader.  Representative APR 18.9% variable.

There is also an Aqua Reward credit card offering 0.5% cashback.  However, Aqua is designed for those with ‘troubled’ credit histories – you will get a low credit limit and having an Aqua card on your credit report may (or may not) look good to other lenders.  Representative APR 34.9% variable.

With these exceptions, the market for ‘no annual fee’ cards is moving towards giving you 0.2% in cashback or vouchers on ‘no annual fee’ Mastercard or Visa reward cards.

Do these cards beat the best travel cards?

No, would be my answer, as long as you are smart in using your miles and points.

The three free travel rewards Mastercard or Visa credit cards are still substantially better value than the main cashback cards.  You’ve got:

Virgin Atlantic Reward Mastercard 

This offers 0.75 Virgin Flying Club miles per £1 spent. If you can get 1p per mile by redeeming smartly, you are getting a 0.75% return on your spending.  Even if you get a little less than this, you are still head and shoulders above most of the cashback cards above.  Until 31st October, you will also receive a sign-up bonus of 7,000 Virgin Flying Club miles.  Our full review is here and you can apply here.  Representative APR 22.9% variable.

IHG Rewards Club Mastercard 

This offers 1 IHG Rewards Club point per £1 spent.  These are generally worth around 0.4p when used for Holiday Inn / Crowne Plaza / InterContinental etc hotel rooms, and at peak dates you can do a lot better.  The card also gets you Gold status in IHG Rewards Club for as long as you hold it.  Our full review is here and you can apply here.  Representative APR 22.9% variable.

HSBC Premier Mastercard  

This offers points which convert into 0.5 Avios, 0.5 Etihad Guest miles, 0.5 Asia Miles or 0.5 Singapore Airlines Krisflyer miles for every £1 you spent.  If you can get 1p per mile – and some of these schemes offer better value than Avios – then you are getting 0.5% back on your spending and potentially more.  Our full review is here.  Note that you need to be a HSBC Premier customer to get this card. Representative APR 18.9% variable.

I have only looked at free cards here because it is easier to compare the rewards.  There are also annual fee versions of the Virgin Atlantic, IHG and HSBC Premier cards as well as the Miles & More cards, but you would need to have a good idea of your annual Visa / Mastercard spending to calculate which works best.

If we go over to American Express, the free Platinum Cashback Everyday card will you get you been 0.5% and 1% of cashback per year.  How close to get you 1% depends on how far you go over £5,000 of spending (you get 0.5% to £5,000 and 1% thereafter).

The free British Airways American Express, American Express Rewards Credit Card or Amex Gold (free in Year 1) should all beat Platinum Cashback Everyday.  All of these cards earn 1 Avios or the equivalent of 1 Avios per £1 spent, and you should be able to get 1p+ per Avios when you redeem.  My spreadsheet of the last 7 million Avios I redeemed shows an average value of 1.2p per point, and I am conservative in my valuations.


I am not suggesting that you should drop your existing reward credit cards and switch to cashback cards instead.  It depends what value you place on your miles and points.

Importantly, these calculations don’t take into account the other benefits offered by travel loyalty cards, such as the 2-4-1 voucher on the British Airways American Express or the free airport lounges passes with Amex Gold.  It is always good to be aware of the alternatives though.   If you have tried and failed to get your friends to switch from ‘no rewards’ cards to a ‘miles and points’ card, at least do them a favour and tell them to get a good cashback card instead.

Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker.  Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.

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  1. A word of warning to anybody considering taking the amex cards only to bank the 5% on £2000 or £2500 in the first 3 months: do not stop spending on the card as soon as you hit these spend targets. To get your 5% credited to your 13th monthly statement you need to spend at least £3000 before your card anniversary date otherwise you will get £0.

    • That only applies to the free Everyday one, the paid for one doesn’t need further spend.

  2. The Original David says:

    Is there any evidence supporting this spurious “Aqua is bad for your credit report” claim? I had a 0% FX Aqua card just before I started this miles and points game, and have had many happy years of successful credit card applications ever since.

    • Frenske says:

      I doubt credit card check which cards you owned in the past and just checks the general score. As long you paid off the bills on time you should be fine.

      • Genghis says:

        Credit institutions come up with their own scoring based on data received. Different institutions look for different things.

      • Each card issuer makes its own decision based on the data in the credit report(s) they request. I do not think they can even see the names of your other lenders, only the balance and payment history, and minimum payment / promotional interest rate markers.

        As Experian, Equifax and Transunion do not issue credit cards, their scores are meaningless.

        All the evidence I have heard indicates that the only time card issuers use the CRA “scores” is when they are extremely low, which results in an automatic decline.

        I and others have been posting the above on various forums for years and nobody has contradicted us – but I would really welcome any input from actual (most likely former) bank underwriters.

    • Aqua shows up as NewDay limited (Aqua). The Amazon card shows up as NewDay limited (Amazon).

      I was given a low limit on both cards which was quickly increased, more on the Aqua card than the Amazon one. Only real issue, especially with a low limit is that they have a limit on how many payments you can make in a month and how many different debit cards you can use for payments – this isn’t declared anywhere I just sometimes get a message saying that the payment has failed as I’ve used too many cards/made too many payments in a month – direct debit for the full amount obviously prevents any interest payments

    • I think it’s a rare example of card snobbery. I even had a comment of ‘cool card’ once. (I don’t normally subscribe to the ‘will they notice my Centurion/etc card’ question.) I have since been upgraded to a Gold Aqua card with no benefits other than a ‘cooler’ design. 🙂

      I don’t think it has had any significant influence over subsequent card applications.

      • Since Aqua is widely advertised as ‘a credit card for bankrupts’ (in effect), do you not have concerns using it in front of friends, family, work colleagues etc?

    • stevenhp1987 says:


      The financial institution doesn’t appear on the credit report (with Equifax & TransUnion, I’ve not worked with implementing Experian) unless it’s changed in the last year.

      They know it’s a credit card with X limit. They don’t know who it’s with.

      • guesswho2000 says:

        +1 to this, and was the same with Experian too (Nationwide surprisingly showed me on their screen exactly what they could see on my credit file when I had a UK mortgage) – it just says what the product is, limit, payment history and dates.

        So it would have something like – Credit Card, limit £10,000, 0000000 (payment history as in number of months arrears each month, from 0-6, 6 being default) and the date the account was opened, for example, even though you can see the issuer when you check it yourself.

        • guesswho2000 says:

          Oh, and they can see the outstanding balance, obviously!

        • stevenhp1987 says:

          Yes, they can see a lot of information. Type of credit, payment history, whether it’s secured to a vehicle/house etc. If there’s a promotional period, when it ends etc.

          What they do not know, is who provides the credit though.

    • iamfugly says:

      Hmm, it does make me wonder whether it is my Aqua card which is holding me back with my Virgin Atlantic applications. I have an excellent credit score, no black marks and can literally get accepted for every card I apply for (with exception for Tandem). I have all the premium cards, Amex Plat, HSBC Premier world elite, etc all the premium current accounts but cannot for the life of me get a Virgin Atlantic card, which is annoying as I much prefer Virgin to BA 🙁

  3. Interesting summary, but not sure I 100% agree, if I read the article correctly the order of the cards is obviously – AMEX (BA/Gold/Plat) first, I agree with that.

    But of the Mastercard/Visa options, isn’t the order:

    Virgin (if virgin miles are any use to you)
    *** TANDEM ***
    HSBC (If you can get it – I guess that’s a smaller percentage)

    As surely cash at 0.5% is better than 0.5% in points?

    So for people that are not interested in Virgin, then the pair that makes sense would be AMEX (BA/Gold/Plat) and Tandem? (Although as well as those two I do have IHG and Virgin myself)

    • Depends on how you use your airline miles and any other card benefits. My miles valuations are low because, for example, a lot of our Avios redemptions do not use a 241 and indeed are done at ‘double Avios’ Gold pricing. If you only do an Avios redemption every 2 years and always use a 241 your valuation is higher than mine.

      I agree with the IHG card, to the extent that IHG often sells points for under 0.5p so you’d be in profit – ignoring the free Gold status – by using Tandem and buying any IHG points you need. HOWEVER the fact that IHG points from the card count towards status is also a factor.

      • Genghis says:

        “ If you only do an Avios redemption every 2 years and always use a 241 your valuation is higher than mine.”
        But you can often buy avios for 1p and you shouldn’t value at more than what you can buy for.

  4. I have had Aqua for a number of years, originally for the no FX fees. £600 limit.

    Then my old BMI card became a Horizon with a £15k limit – and no FX fees.

    Kept the Aqua – great card for lunches in Barcelona etc, low limit means no need to worry if it gets stolen. Horizon is my card for last-minute car hire and they block 1500 or 2000 euros!

    Only issue with Aqua is that they report your balance in a different way to the others. Of course, I pay off all cards in full every month – or several times a month!

    But Aqua tends to show the balance every month as though I haven’t paid it: perhaps to show that I have a debt and can manage it?

    Anyway, I am ALWAYS referred to credit reference agencies – we have a new house, on an airfield (so no xxx Road, Street or Avenue address) and the address formats don’t match with the Post Office and the agencies. Aaaargh!


    • guesswho2000 says:

      Aqua (along with most cards) will report a balance each month – it’s the balance on the day they report to the agency. What they also report is the balance on previous months, the payment each month, and whether the account is paid on time, all of which are much more important.

    • RussellH says:

      Round here no one has a xxx Road, Street or Avenue address, we just have house names. But six of the houses on our postcode have housenames that include a number.
      All the ‘experts’ out there will tell you that a number and a postcode will produce a unique address, but unless you realise that these non-house numbers are actually part of housenames (as most people do not) an awful lot of mangled addresses get produced.
      It used to be quite common for me to receive letters (mainly from insurance companies, for some reason) addressed to:
      Line 1: abcd efgh ijklmn
      Line 2: [number]
      Line 3: Village
      Line 4: Posttown
      Line 5: Postcode

      There is more than one address starting 1… and 2… in our Postcode

    • Annually onto your January statement as credit

    • It goes onto your January or February statement as a credit – you are not physically sent any cash.

      • RussellH says:

        Thanks both.
        I guess that means I need to use it around the turn of the year…

  5. There are so many layers to consider, it takes a bit of effort to choose the right card every time.

    So, I’m going Grocery shopping tonight. In my pocket I have £6 off £40 at Tesco, £4 off £40 at Sainsbury and £10 off £50 at Waitrose.

    I also have a 5% offer at Sainsbury’s (Halifax), 5% offer at Waitrose (Halifax), 5% at Morrison’s (Halifax), 10% offer at Morrison’s (Amex).

    If I use my Halifax Card at Waitrose or Morrisson’s I get 5% moneyreturn from an InStore scheme, if I use my Amex Card at Waitrose I get 5 Virgin Miles per £1 from their InStore scheme.

    I think I’ll go to Waitrose and use a £10 off £50 voucher and my Halifax Card, generating £2 moneyreturn and £2 Instore moneyreturn. or £50 for £36.

    • My wife’s very good at keeping on top of these offers and knowing which card to use. Luckily she’s really got into the points saving game. Unfortunately she’s also discovered that she can buy stuff with points….

  6. guesswho2000 says:

    Effectively yes, because they come under the banner of “any Amex Personal card”. In practice, you may slip through the net (no comeback if you don’t), and there’s the usual Amex Platinum and BAPP exceptions to the rule.

  7. Impact everything except BAPP and the small business cards.

    (EDIT: and Plat, sorry. Teach me to type whilst charging down a runway!)

    Virgin and Lufty are both good cards but, unless you are a high spender, you need to decide if you would earn enough for a good redemption. Not an issue if you also earn by flying.

  8. After year 1 …

  9. Peter K says:


  10. memesweeper says:

    Absolutely … if I acquire points that can only (sensibly) spent on leisure I can’t waste them on essentials. I have done c’back cards in the past but prefer points now. Also, with a lot of business spend on my cards, there’s no question of points being a taxable benefit. I’m pretty sure earning normal, spendable £ through work is a taxable benefit.

  11. How can £10,000 of spending be the break even point for a £25 fee when 1% of £10,000 is £100…? Confused.

    • Genghis says:

      At £10k spend, disregarding sign up, i.e. relevant for ongoing spend:
      on the free card, CB would be £25 on the first £5k followed by a further £50 on the second £5k, total £75.
      On the paid card, CB would be £100 on the first £10k spend less the £25 fee = £75.

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