Getting paid to shop seems like a strange idea, but that’s exactly what cashback is. Whether it’s through your credit card or via an app on your mobile phone, it’s possible to claw back a little of your spending each time you shop.
It’s not free money though. Cashback is offered as an enticement to make you spend, and possibly on things you might not have bought in the first place. Plus you might be able to find what you want cheaper without cashback if you shop around.
But if you’re planning on buying something anyway, and know the pros and cons of each method, it’s a fantastic way to boost your income.
There are four key ways to earn cashback:
You need to apply for a specialist cashback credit card, but if accepted you’ll normally be able to get between 0.5% and 3% in cashback on each full pound you spend. The cashback is normally paid annually, or as points you can exchange for a reward, often vouchers.
Each credit card works in different ways. Some give the same rate on everything you buy, while others only give you money back on specific purchases, such as petrol.
Many also come with a fee, so it’s worth working out if you’ll be able to earn enough cashback to cover this.
The important thing to remember is they’re only a good idea if you can pay the balance off in full every month – any interest charged will negate any benefits from cashback. Plus if you think having a credit card will encourage you to spend more, it might be better to stick to the ways you currently pay.
There are a handful of current accounts which will give you cashback, again between 1% and 3% on your household bills. They do come with a fee, so check how much you’re likely to earn in cashback to see if it’s worthwhile.
Some other current accounts also offer bonus cashback specific to chosen shops and restaurants. You normally need to activate these offers.
There are a handful of websites which act as the middle man between you and online retailers, and in return they give you a cut of the commission.
This could be a couple of percent when buying some clothes or booking a hotel, to hundreds of pounds for opening a new mobile phone contract.
The main issue here is the money isn’t guaranteed, so don’t buy something through cashback sites based solely on the extra cash you’ll get. Until the money is in your account, don’t spend it – and again, it’s worth shopping around to check there aren’t better deals available without cashback.
However, if you follow the instructions on the site carefully you should be able to quickly build up a reasonable amount.
The top two are Quidco and Topcashback, though it’s worth shopping around to find the best deals.
Switching your energy, phone, broadband and TV services can often save you hundreds of pounds – and you can sometimes make a little extra by looking for cashback.
When you use a comparison site, it’s most important to make sure you’re choosing a provider that works for your needs, but an extra £30 could be a useful nudge to help chose between two similarly priced options.