John Lewis and Waitrose Partnership Mastercard cuts cashback rate – what’s the best alternative?

John Lewis and Waitrose have made a sharp cut to the cashback reward on their Partnership credit card.

Whilst it has nothing to do with miles and points, we mention the John Lewis / Waitrose Partnership credit card quite a bit on Head for Points.

This is because it is the best mainstream cashback (well, pseudo cashback) Visa or Mastercard credit card on the market.  It is always important to know what other rewards cards are out there, because miles and points from credit card spending are NOT free.  You could have put the same level of spending onto a cashback credit card instead.

The John Lewis / Waitrose credit card had a lot going for it:

No annual fee

1% cashback at John Lewis and Waitrose

0.5% cashback on all other spending

Cashback paid in the form of John Lewis and Waitrose shopping vouchers, sent every four months in chunks of £5

You can see how a lot of reward cards don’t look too good compared to this.  The free IHG Rewards Club Mastercard, for example, earns 1 IHG Rewards Club point per £1 you spend.  However, IHG regularly sells points for 0.4p each, so you’d be better off having the John Lewis card and buying IHG points for cash when there is a promo on!

(On the upside, points earned from the IHG credit card count towards elite status.  You also get IHG Rewards Club Gold Elite status for holiding the card.)

No other retailer card came close to this.  Take a look at this HfP article which discussed how M&S, ASDA, HSBC, Sainsbury’s and Amazon had all cut their cashback rates to 0.1% to 0.25%.

The bad news is that John Lewis / Waitrose is drastically cutting the return on the card and moving it in line with its competitors.

From 4th September, the new earning rates will be:

1.25% cashback at John Lewis and Waitrose

0.25% cashback on all other spending

Unless you are spending disproportionately large sums in Waitrose and John Lewis versus all other shops, the returns on the card just got a lot worse.

That said, given the imposition of 0.3% interchange fees a couple of years ago, it was amazing that the card had held out at 0.5% cashback for so long.

It is difficult to recommend the card now.  Whilst 1.25% cashback at John Lewis and Waitrose is attractive, you can use American Express at both of these retailers.  You would still be better off using, say, a British Airways Premium Plus American Express card and earning 1.5 Avios per £1, albeit that card has an annual fee.

What is the best free Visa or Mastercard now?

If you’re looking for a free Visa or Mastercard to use at places where American Express is not accepted, the IHG Rewards Club card suddenly looks a lot better.  The Virgin Atlantic card is also worth a serious look.

With the IHG Rewards Club Mastercard, you’re getting:

1 IHG Rewards Club point (which I value at 0.4p) per £1 spent

Points count towards status

Gold Elite status in IHG Rewards Club

10,000 IHG Rewards Club points as a sign-up bonus (sign-up points do not count towards status)

No annual fee

Alternatively, you have the Virgin Atlantic Reward Mastercard:

0.75 Virgin Flying Club miles per £1 spent (which I value at 0.75p)

2-4-1 or upgrade voucher for spending £20,000 in a year

Free access to Virgin Money lounges across the UK

No annual fee

Note that there is no sign-up bonus on the free Virgin Atlantic credit card.  It actually makes more sense, in Year 1, to pay £160 for the Virgin Atlantic Reward+ credit card which comes with 15,000 Flying Club miles as a sign-up bonus, and earns 1.5 miles per £1 spent.  You can downgrade to the free card from Year 2.

Find out more

Our full review of the IHG Rewards Club Mastercard is here and you can apply here.

Our full review of the free Virgin Atlantic Reward Mastercard is here and you can apply here.

Our full review of the £160 Virgin Atlantic Reward+ Mastercard is here and you can apply here.

---

Want to earn more points from credit cards? – April 2024 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.