Maximise your Avios, air miles and hotel points

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 continue to be squeezed it is worth keeping an eye on the best alternatives.

After all – and this is a topic I am looking at in more detail tomorrow – you could use the cashback to pay for travel directly or even buy points in your preferred programme.

What is the best cashback credit card?

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.

There are two American Express cashback cards.  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 27.3% variable, including the £25 fee, based on a notional £1,200 credit limit.  The interest rate on purchases is 22.2% 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 22.2% variable.

To save you getting your calculator out to assess the impact of the £25 fee on your returns, the break-even point for getting the £25 Platinum Cashback card is £10,000 of spending per year.  If you would spend over £10,000 on the card, pay £25 for the Platinum Cashback version.

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

What are the best free Mastercard and Visa cashback products?

Cashback Visa and Mastercard products without annual fees 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 in 2019 and now gives 0.5p of Amazon vouchers per £2 spent outside Amazon (ie 0.25%).  Representative APR 21.9% variable.

John Lewis cut the rate on its Partnership Card from 0.5% to 0.25% cashback on non-John Lewis / Waitrose spend in July 2020 (this card pays in John Lewis / Waitrose shopping vouchers).  Representative APR 18.9% variable.

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%.  Representative APR 21.9% variable.

An impressive new entrant is the Barclays Rewards card.  Not only does this give you 0.25% cashback – in real cash, not vouchers – but it also have no foreign exchange fees.

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%.

visa mastercard

Do these cards beat the best free travel cards?

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

American Express

The free British Airways American Express, American Express Rewards Credit Card or Amex Gold (free in Year 1) should all beat Platinum Cashback Everyday. 

If you use your miles wisely, you would be better off with one of the three cards.

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 7.7 million Avios I redeemed shows an average value of 1.18p per point, and I am conservative in my valuations.

Arguably …. and this is an article for another day …. the free British Airways American Express card is now the best free cashback credit card in Britain for most people.  You get 1 Avios per £1 which you can convert into 1.6 Nectar points, which are worth 0.8p when spent in Sainsbury’s, Argos or eBay.  You need to spend £13,000+ per year before the Platinum Cashback Everyday card pays you more.

Visa and Mastercard

The best 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 free card 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.  

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

IHG Rewards Mastercard 

This offers 1 IHG Rewards point per £1 spentThese 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 for as long as you hold it.  

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

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 HSBC Premier Mastercard review is here.  Note that you need to be a HSBC Premier customer to get this card. 

I have only looked at free cards here because it is easier to compare the rewards.  

That said, as there is no sign-up bonus on the free Virgin Atlantic credit card, it 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.  This card earns a huge 1.5 miles per £1 spent and you can downgrade to the free card from Year 2.

Conclusion

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.

American Express Platinum Cashback

Bonus: 5% cashback (to £125) for three months

Read our full reviewApply here

Other information:

  • Cashback paid in a lump sum after 12 months
  • Annual fee: £25

Representative 29.8% APR variable based on an assumed £1,200 credit limit and £25 annual fee. Interest rate on purchases 24.5% APR variable.

See if you qualify for the 5% cashback sign-up bonus +

You will receive 5% cashback on purchases on the American Express Platinum Cashback card within 90 days of signing up.  This is capped at £125.

To qualify for the bonus, you must NOT, currently or in the previous 24 months, have held any other personal American Express card.

You are OK if you had a supplementary card on someone else’s American Express account.

You are OK if, currently or in the previous 24 months, you have held a Business American Express card.

For clarity, you can still apply for the American Express Platinum Cashback card even if you do not qualify for the bonus.  You will receive the standard rate of cashback on your spending.

Learn more about the card benefits +

American Express Platinum Cashback is the most generous cashback credit card in the UK.

After the first three months, during which the special bonus rate applies:

  • Spend £0 to £10,000 and receive 0.75% cashback on purchases
  • Spend over £10,000 and receive 1.25% cashback on purchases

Cashback is paid in a lump sum at the end of each 12 month period.  If you close the card mid-year you will lose any accumulated cashback.

As our review shows, this card is better value if you will spend over £10,000 per year.  If you will spend under £10,000 per year, you should apply for the free American Express Platinum Cashback Everyday credit card instead.  The cashback rate is lower but this is offset by the lack of any annual fee.

American Express Platinum Cashback Everyday

Bonus: 5% cashback (to £100) for three months

Read our full reviewApply here

Other information:

  • Cashback paid in a lump sum after 12 months
  • Minimum spend of £3,000 per year required to receive cashback
  • Annual fee: Free

Representative 24.5% APR variable

See if you qualify for the 5% cashback sign-up bonus +

You will receive 5% cashback on purchases on the American Express Platinum Cashback Everyday card within 90 days of signing up.  This is capped at £100.

To qualify for the bonus, you must NOT, currently or in the previous 24 months, have held any other personal American Express card.

You are OK if you had a supplementary card on someone else’s American Express account.

You are OK if, currently or in the previous 24 months, you have held a Business American Express card.

For clarity, you can still apply for the American Express Platinum Cashback Everyday card even if you do not qualify for the bonus.  You will receive the standard rate of cashback on your spending.

Learn more about the card benefits +

American Express Platinum Cashback Everyday is the most generous free cashback credit card in the UK.

After the first three months, during which the special bonus rate applies:

  • Spend £0 to £10,000 and receive 0.5% cashback on purchases
  • Spend over £10,000 and receive 1% cashback on purchases

You must spend at least £3,000 per year to receive cashback.

Cashback is paid in a lump sum at the end of each 12 month period.  If you close the card mid-year you will lose any accumulated cashback.

As our review shows, this card is better value if you will spend less than £10,000 per year.  If you will spend over £10,000 per year, you should apply for the £25 American Express Platinum Cashback credit card instead.  The cashback rate is higher and you are better off even after paying the annual fee.

Virgin Rewards credit card

Virgin Atlantic Reward Mastercard

Bonus: None

Read our full reviewApply here

Other information:

  • Get a ‘2 for 1’ voucher, valid on cash or points tickets, when you spend £20,000 in a year
  • Alternatively, claim an upgrade voucher or Clubhouse lounge passes
  • Get free access to Virgin Money lounges across the UK
  • Annual fee: Free

Representative 22.9% APR variable

See if you qualify for the sign-up bonus +

There is no sign-up bonus on the free Virgin Atlantic Reward Mastercard.

You may want to consider applying for the Virgin Atlantic Reward+ Mastercard instead.  This comes with a £160 annual fee but has a sign-up bonus of 15,000 Virgin Points.  You also receive a higher earning rate of 1.5 miles per £1 spent.

Learn more about the card benefits +

All Virgin Atlantic credit card holders receive free access to Virgin Money lounges across the UK.

When you spend £20,000 per year on the free Virgin Atlantic Reward Mastercard, you can choose a benefit.  This is what you can pick from:

A 2-4-1 voucher, valid for two years, for a Virgin Atlantic cash flight or a Virgin Flying Club redemption, in Upper Class, Premium or Economy

A return upgrade – on either a cash or miles ticket – from Premium to Upper Class, or from Economy Delight/Classic to Premium.  You can either upgrade 1 x return flight if travelling alone or 2 x one-way legs of two return flights if travelling with someone else.

A Virgin Clubhouse lounge pass (requires a same-day Virgin Atlantic, Delta, KLM or Air France flight)

Here’s the small print:

If you are a Red (no status) member, you need to pay 50% of the miles for your 2nd ticket if you redeem your 2-4-1 voucher in Upper Class.  This means that, for Upper Class redemptions for Red members, it is effectively a ‘2 for 1.5’ voucher. For Economy or Premium redemptions, it is a genuine ‘2 for 1’.

If you are a Gold member, you would receive two Clubhouse lounge passes instead on one if you chose that option

Taxes and charges need to be paid on the ‘free’ ticket as part of your 2-4-1 booking

Vouchers are valid for two years and you must fly the outbound leg of your trip before the expiry date

Virgin Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

Bonus: 15,000 points

Read our full reviewApply here

Other information:

  • Get a ‘2 for 1’ voucher, valid on cash or points tickets, when you spend £10,000 in a year
  • Alternatively, claim an upgrade voucher or Clubhouse lounge passes
  • Get free access to Virgin Money lounges across the UK
  • Annual fee: £160

Representative 63.9% APR variable based on an assumed £1,200 credit limit and £160 annual fee.  Interest rate on purchases 22.9% APR variable.

See if you qualify for the 15,000 points sign-up bonus +

You receive a bonus of 15,000 Virgin Points with your first purchase.

There are no restrictions on earning the bonus if you are accepted.  However, you cannot apply for a card if you currently have, or in the previous six months have had, a Virgin Atlantic credit card.

Learn more about the card benefits +

All Virgin Atlantic credit card holders receive free access to Virgin Money lounges across the UK.

When you spend £10,000 per year on the Virgin Atlantic Reward+ Mastercard, you can choose a benefit.  This is what you can pick from:

A 2-4-1 voucher, valid for two years, for a Virgin Atlantic cash flight or Virgin Flying Club redemption, in Upper Class, Premium or Economy

A return upgrade – on either a cash or points ticket – from Premium to Upper Class, or from Economy Delight/Classic to Premium.  You can either upgrade 1 x return flight if travelling alone or 2 x one-way legs of two return flights if travelling with someone else.

A Virgin Clubhouse lounge pass (requires a same-day Virgin Atlantic, Delta, KLM or Air France flight)

Here’s the small print:

If you are a Red (no status) member, you need to pay 50% of the points for your 2nd ticket if you redeem your 2-4-1 voucher in Upper Class.  This means that, for Upper Class redemptions for Red members, it is effectively a ‘2 for 1.5’ voucher. For Economy or Premium redemptions, it is a genuine ‘2 for 1’.

If you are a Gold member, you would receive two Clubhouse lounge passes instead on one if you chose that option

Taxes and charges need to be paid on the ‘free’ ticket as part of your 2-4-1 booking

Vouchers are valid for two years and you must fly the outbound leg of your trip before the expiry date

Sainsbury's Nectar credit card

IHG Rewards Mastercard

Bonus: 10,000 points

Read our full reviewApply here

Other information:

  • Receive Gold Elite status in IHG Rewards
  • Points from spend count towards elite status
  • Annual fee: Free

Representative 22.9% APR variable

See if you qualify for the 10,000 points sign-up bonus +

You receive 10,000 IHG Rewards points as a sign-up bonus when you spend £200 within 90 days.

There are no restrictions on receiving the bonus if you have previously held this card or the (no longer available) IHG Rewards Premium Mastercard.

Learn more about the card benefits +

All IHG Rewards cardholders receive Gold Elite status in IHG Rewards for as long as they hold the card.

This is the only UK travel card where the points you earn from spending count towards elite status.  The 10,000 points you receive as a sign-up bonus do not count towards elite status, however.

HSBC Premier Mastercard

Bonus: None

Read our full reviewApply here

Other information:

  • Only available to HSBC Premier account holders
  • Annual fee: Free

Representative 18.9% APR variable

See if you qualify for the sign-up bonus +

There is no sign-up bonus on the HSBC Premier Mastercard.

There is a bonus on the HSBC Premier World Elite Mastercard.  This is worth 40,000 HSBC points (worth 20,000 Avios or other airline miles) for spending £2,000 within three months and a further 40,000 HSBC points (=20,000 miles) for spending £12,000 within twelve months.  The annual fee is £195 and you need to pay the fee for the second year in order to receive the second half of the bonus.

Learn more about the card benefits +

The points earned with the HSBC Premier Mastercard can be transferred to four airline frequent flyer schemes – British Airways Avios, Cathay Pacific Asia Miles, Etihad Guest or Singapore Airlines KrisFlyer.

They can also be redeemed for other items including retailer gift cards.

Cardholders can access any airport lounge in the LoungeKey network for a fee of £20 per visit.

(Want to earn more miles and points from credit cards?  Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Card Offers’ link in the menu bar at the top of the page.)

Comments (53)

  • Harrier25 says:

    Linking my IHG Black Rewards card (no longer available to new applicants) to my Curve card still attracts the additional IHG points for foreign spend.

  • BS says:

    It does.

  • Wally1976 says:

    0.5 Avios per £ if you have a Club Lloyds account (which is well worth having in its own right). Obviously not available to new applicants though.

  • James says:

    Yes it does. You get the actual cash at the end of the year.

  • Doug M says:

    With the current situation direct flights when allowed make a lot of sense.
    But as there’s three of you, if you accept a little risk you should look at ex-EU cash fares over buying Avios. Having to pay Avios x 2 and Fees/Charges x 3 might make ex-EU seem like a bargain depending on where you fly. If it’s the USA there’s some cracking deals at times from fairly easy locations like Dublin, Paris and Amsterdam.

  • The Urbanite says:

    Doesn’t have to be either or in my eyes – collect everything!

  • Jimc says:

    I use the Capital On Tap business card, putting through around £75k per month spend. I always used to look at the Avios as ‘free, and It’s only recently I’ve started to realise their 1% cash back is in most cases the more attractive offer. The amount of cash given back makes it easy to pick and choose airlines and flights to fit with our schedule.

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