3 Nifty ways to earn cashback and save money while you shop

It might sound too good to be true, but specialist websites, current accounts and credit cards will actually pay you for using them when spending money. Though how much you make depends on how much you spend, it can quickly add up to a decent amount.

It’s how I do the bulk of my spending and shopping, and on the whole, the effort is minimal each time. Even setting up the necessary accounts isn’t too much hassle—though many of them require you to be online.

First up is the cashback website. There are a number of these, but the leading ones are TopCashback and Quidco and they’ll usually have the best rates. These two are free to use, though you can pay a membership fee for extra features and boosted rewards.

They are effectively portals you go through rather than directly to a retailer’s website. Each contains thousands of well-known brands, from Argos to M&S to Virgin Media, and they’ll offer varying rates of cashback.

This could be a fixed percentage, say 1% to 10%, based on the final basket of what you buy. Or it could be a set amount, potentially up to £100 on things like new broadband contracts or insurance policies.

To get cashback, click through from the cashback site and then shop as normal. Make sure you don’t already have the shop open on another tab, as that could hinder tracking.

Don’t expect the money back straight away. First, the retailer has to confirm the purchase, and this can take months. Then it has to pay a commission back to the cashback site. Only then will you finally get your money.

Be aware that, with these sites, the cashback is never guaranteed. Don’t buy something because of the money you hope to earn—see it as a way to get extra back.

There are some new apps that will earn you money too. Airtime Rewards links to your debit or credit card, and you’ll earn when using those cards at participating retailers, such as Boots and Zizzi. It pays you back as credit towards your mobile phone bill, though it’s restricted to the major networks.

Or you can buy gift vouchers from JamDoughnut and earn instant money back. These don’t need to be for others­—you can use them for your normal shopping at retailers, including supermarkets such as Morrisons or Sainsbury’s.

Spend a cashback card as you would an ordinary credit card to earn cashback

Alongside these sites and apps you can earn cashback from a cashback card. You simply spend as you would with this card rather than your normal spending card. Once you’ve got one, it’s the easiest way to earn.

A handful of banks will offer this on their current account debit card, with app-only bank Chase giving 1% back for a year, capped at £15 a month. You’ll need to deposit at least £500 into the account each month to activate your cashback for the following month.

For uncapped earnings, and if you want to benefit from additional consumer protection on purchases over £100, you’ll want to look at a cashback or reward credit card. The latter is different, as you’ll earn points, which you’ll convert to vouchers in order to spend, usually at a specific retailer.

And of course, since they are credit cards, you need to be sure you clear the balance completely every month to avoid any interest or charges. If you fail to do this, or spend more than you can afford with the card, then you’ll wipe out any benefits you would have gained from the cashback or rewards.

Setting up a direct debit to clear what you owe every month can help you avoid this.

Watch out too for annual fees. Sometimes these only start after a year so be sure to calculate whether it’s worth keeping the card when it’s no longer free.

The highest paying ones are from American Express (aka Amex). The Amex Nectar card offers two Nectar points for every £1 spent, which is the equivalent of 1% back.

For pure cashback, the Amex Platinum Cashback pays 0.75% back on the first £10,000 you spend, then increases to 1.25%. The money is paid annually as a credit to your card so you can spend it wherever you want.

Sadly not all retailers will accept American Express, so you might want to have an extra cashback credit card on hand just in case. The Barclaycard Rewards card pays a much lower 0.25%, but is fee-free to use overseas.

Or, if you shop regularly at places like John Lewis, Waitrose, M&S or Asda, you might want to get their own reward cards, which pay between 1% and 1.25% on shopping in their stores, but less elsewhere.

With most cashback and reward credit cards you can also get a welcome bonus or boosted points on your initial spending, often for the first three months.

There will be eligibility criteria, and often a spending threshold needs to be hit. Timing can be key to ensure you maximise your return—which can easily be £100 or more.

Some bank accounts allow you to earn cashback on your bills

The final place to earn cashback is with a Santander current account that will give you money back on your bills. There are two options available to new customers—the 123 and the Edge.

The 123 offers up to 3% on your bills, while the Edge provides a flat 1%. This covers your payments for council tax, water, energy, broadband, phone and TV.

The Santander website has a calculator where you can enter your monthly bills to see what you’ll get over a year, after the monthly fees have been taken into account.

For most people, the 123 account will be most profitable just on cashback, though if you have savings the Edge also offers 4% interest on up to £4,000, which might be worth more.

There’s no need to switch from your existing account to have one of these. You can simply open one up and transfer your direct debits across to the new account. Just make sure there’s enough in there each month to cover those bills.

Read more: 8 Secrets of great savers

Read more: How to make the most out of your savings

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