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How to Make Money While You Spend


1st Jan 2015 Managing your Money

How to Make Money While You Spend

No matter how much we focus on switching off lights and turning down heating in order to save money, we will still end up spending money on necessary things. Luckily, spending money can earn you money as well. Confused? Don’t be! There are cashback credit cards as well as websites that can quickly provide you £100s for just doing your usual shopping.

What is Cashback?

Cashback offers simply provide you a percentage back on your purchase. So, if you spend £50 on something, you might receive 2% cashback on it. The percentages on both websites and credit cards are often along the lines of 1%-5%, which on its own might not seem like a lot. But if you consider, you might be able to make it on the majority of your purchases, the sums can quickly add up.

Finding the Best Cashback Credit Card

One of the easiest ways to make money while you spend is with a cashback credit card. This means that you earn a specific percentage every time you use the card. You don’t need to pay tax on your earnings and you receive the money directly on your bank account.

You might feel like this sounds too good to be true, but the banks often cover the cost through the interest they charge you if you don’t pay the credit card balance on time each month. Therefore, the main thing to know about cashback credit cards is that you need to always pay the monthly balance in full. The easiest way to do this is by setting a direct debit for the monthly bill – you don’t forget to pay and there’s no chance of it harming your credit rating. Just remember to select the option “pay in full” when you set it up with your card provider.

You can find the best cashback credit card offers online through price comparison websites. Some of these credit cards come with an annual fee, but you can also find ones that don’t.


Using Cashback Websites

As well as using cashback credit cards, there are also websites that offer cashback for your purchases. The most notable websites in the market are Quidco and TopCashBack. Some banks, such as the Cashback Plus by NatWest, also provide you extra rewards for shopping with specific retailers.

The websites are free to join and you’ll receive a percentage of your purchases as cashback when you shop through the websites. This means that whenever you need to make a purchase, you can check the website whether it offers specific rewards or cashback on the site and then buy the product normally.

For the websites, the advantage is that they receive a commission of the sale from the company. This is then partly used to provide you the cashback. Therefore, you’ll benefit from your shopping and the website is rewarded.

You’ll typically receive the cashback on your online account and you can then use it to receive vouchers or transfer it to your bank account. You need to remember that there is no guarantee you’ll necessarily receive the cashback. Therefore, you don’t want to count that money as yours until you’ve actually received it.

How to Make Cashback Work for You

The key to making the most out of your cashback system, whether credit card or the websites, is all about considering it as a bonus. You should never purchase things just for the cashback benefit alone. After all, you will end up spending more than you’ll receive, so you only want to use the offer on things that you need to buy at any specific moment.

In addition, cashback websites often offer special deals for switching your insurance provider. Even though you’ll receive a bonus for doing so, the new deal might not be better than your current deal. Only change providers like this when the new deal is better as well.

If you consider cashback as a bit of an extra and always weigh the deal over the potential cashback you’ll receive, cashback websites and credit cards can be a great way to make money while you spend.