The Halifax 1% cashback card: is it worth it?
Recently, rates on many cashback credit cards have dropped to just 0.5% or less. Some, like the RBS Black Credit Card, even have an APR of 51.8% and charge a £250 annual fee.
The card pays 1% cashback on supermarket and petrol spending, and 0.5% on "other purchases".
The cashback card is a Mastercard with no annual fee. Unfortunately, the cashback is limited to £150 a year, and requires a minimum spending of £1,250 a month to claim the full amount.
Some might prefer the American Express Platinum card that pays 5% for the first 3 months, but that has a maximum of £2k spending during the introductory period, which drops to between 0.5%-1.5% afterwards.
The Halifax cashback mastercard raises the question of whether the varied interest rate of 15.9% to 21.9% (depending on your credit ratings) is worth the cost/benefit of the savings. Also, not every supermarket is taking part in the scheme. The ones that are include Tesco, Sainsbury's and Morrisons. Petrol coverage includes Shell, Esso, and BP.
The card is only available online via the Halifax website.
Question is, could this be an expensive mistake for the average consumer, with the exception of the rare creatures that pay off their card balance fully at the end of each month? And if you have cashback cards, what are your favourites, and why?