What’s the deal?
A Halifax credit card that pays 1 per cent cashback on supermarket and petrol spending – £1 for every £100 – and 0.5 per cent on other purchases. The Mastercard has no annual fee and an interest rate of 15.9 to 21.9 per cent, depending on how applicants are credit-rated.
The higher cashback rate is given on spending at most major supermarkets, including Tesco, Sainsbury’s, and Morrisons, and petrol stations such as BP, Shell and Esso.
Is this good?
Cashback credit cards make sense for anyone who pays off their bill each month. The rebates are tax-free and can be spent on anything – unlike with other reward-style cards.
Many cards have cut their cashback amounts recently, typically to 0.5 per cent or less, so Halifax’s 1 per cent deal on everyday purchases of food and fuel makes it one of the best offers available to new customers. The 1 per cent should also be payable on non-food items at supermarkets such as Tesco, says Halifax, although at Marks and Spencer only food tills give the higher rebate.
The card can also be used in conjunction with loyalty cards such as Tesco’s Clubcard to earn extra rewards – giving a total of 2 per cent in this case (1 per cent cashback and 1 per cent in shopping vouchers).
What’s the catch?
Cashback is limited to £150 a year. However, this would still equate to £1,250 of qualifying food and fuel spend a month.
Cardholders have to telephone Halifax to claim their rebates, which can only be redeemed in multiples of £15.
For users who don’t pay off their bills in full each month, interest costs offset the benefit of the cashback – so these users would be better off with a card with a 0 per cent rate.
What’s the alternative?
American Express’s Platinum card offers a 5 per cent cashback for the first three months – £5 for every £100 spent. But this high rebate is limited to £2,000 of spending. After the introductory period, it pays between 0.5 and 1.5 per cent, depending on annual spend. However, some retailers won’t accept Amex.
Lovemoney.com, a financial website, calculates that someone spending £2,500 on food and fuel and £2,500 on other purchases in a year would earn £37.50 cashback from Halifax, against £32.50 from Amex (after the 5 per cent introductory deal period).
Some credit cards offer higher rewards for purchases from individual retailers. For example, the Shell Mastercard gives a 3 per cent “fuel rebate” on petrol bought at Shell stations. Rebates are redeemed as discounts on Shell fuel.
How do I find out more?
www.halifax.co.uk or 0800 028 3258 (the card is not available through branches)
www.americanexpress.com
