Deal of the Week: Cashback card with travel insurance

What’s the deal?

A credit card offering cashback of up to 4 per cent as well as free worldwide family travel insurance.

The Capital One Cashback with World Mastercard pays cash rebates of 4 per cent on spending until 1 September and 1 per cent thereafter.

Its free insurance also includes cover for the excess on rental cars and for lost house or vehicle keys.

Cardholders can also take advantage of Capital One’s free identity-theft protection service. This alerts individuals if someone applies for credit in their name, provides an adviser to help resolve cases of stolen identity, and gives two free credit reports a year. The card has no annual fee and an interest rate of 15.9 per cent.

Is this good?

Both the introductory 4 per cent and ongoing 1 per cent cashback rates are among the highest available.

And unlike the “travel accident” cover provided by many credit cards, this card features full annual travel insurance for the holder and family, including for business trips and skiing. The travel insurance alone could be worth at least £50 a year.

What’s the catch?

Cashback is only earned on up to £1,500 of spending each month, meaning a monthly rebate limit of £60 until September and £15 thereafter.

In general, to be covered by the free travel insurance, users need to put at least 75 per cent of their transport and/or accommodation costs on the card. That said, the £5m of overseas medical expenses insurance can be called on irrespective of whether the card was used to pay for the travel, says Capital One.

The firm also says the card is only available to individuals with “excellent credit ratings”, including having total card balances of less than £10,000.

What are the alternatives?

Particularly for high spenders, the American Express Platinum Moneyback card offers a better cashback deal: 5 per cent for the first three months, followed by rebates of 0.5 to 1.5 per cent, depending on spend.

Amex’s Blue Sky card offers an effective cashback rate of 1.25 per cent, although its rebates are only redeemable against subsequent travel-related spending. This card also gives some free travel insurance and 0 per cent interest on purchases for the first six months.

How do I find out more?

Online: www.capitalone.co.uk or phone 0800 952 5452; www.americanexpress.co.uk; or www.moneysavingexpert.com for details of more cashback and reward card deals.