Cashback Debit Cards

There are nearly 41 million debit card holders in the UK; over eight out of ten adults have one and we spend over £150 billion per year with them. It is only recently that debit card holders have been given attention by major banks Halifax and Egg. The Halifax recently brought out their Moneyback current account offering 1% cashback on Debit Card purchases up to a total of £10,000. This could equate up to £100 per year.

What is a Cashback Debit Card?

Cashback Debit Cards work in the same way as any other debit card, i.e. funds are immediately taken from the cardholders' current or savings accounts. However, with a Cashback Debit Card, you get a percentage of the purchases back in a form of  cashback. While Cashback Debit Cards provide a good return, the cashback return is limited to a maximum of £100 per year.  This doesn't compare well with the top Cashback Credit Cards which offer higher cashback returns between 2-3% of your total spending for the year with no limits on how much you can get back.

Cashback Debit Cards as a mechanism for children savings

For those disciplined enough to have one, cashback and loyalty cards can be a useful additional tool to save for your children’s future. If you view the cashback as free cash, any money accumulated can go straight into your children’s savings account. You will be surprised how quickly this savings can add up.

Currently, there are only two Cashback Debit Cards in the market place: How do they work?

Halifax Moneyback account
If you pay in £1,000 or more every month (e.g. your salary), you will get 1% moneyback on the first £10,000 you spend on debit card purchases. That could add up to £100 every year.  However, if you spend over £10,000 on your debit card per year, you could carry on earning moneyback at a lower rate of 0.1%.

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Other benefits of this account include a Visa Debit card with £100 cheque guarantee facility and cheque books which are available on request. If you withdraw up to £300 a day, use of any Halifax or Bank of Scotland cash machine is free of charge. There is also a 24-hour online and telephone banking hotline with access to all the Halifax branches so you can talk to an actual person. And finally, there is an option of overdraft facility (subject to status).

Egg Money
Egg also recently brought out a new card that is a cross-breed between a debit and credit card. It acts as a debit card when your account is in credit and acts as a credit card when you’re overdrawn.

If you pay your card bills in full every month (which is highly advisable), the good news is you have 50 days in which to do it. There are no monthly payments required when you have a positive balance, but charges apply when you are overdrawn. It has a typical rate of 7.9% APR variable and you can even decide to only pay off the minimum amount.

You'll get 4% gross pa/AER variable on positive balances in your Egg Money account. That’s lower than the best current account available.  Egg money also offers 1% cashback on all purchases.

Cash back is paid annually in March, as long as your total cash back earned over the year is more than £5. You'll earn cash back up to a maximum amount of £200 in each 12 month statement period commencing with the March statement up to and including the February statement the following year.

As with most current accounts, you have access to online and telephone banking in addition to free weekly text balance updates so you can manage your account easier. You can also get an additional 20% cash back when you buy items with Egg’s selected online retailers (they have their own cashback shopping sites)  

Other related articles from MyEggNest

Cashback Credit Card
Cashback Shopping

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