How to maximise cashback on your spending

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Spending challenges and no-spend periods are great ways to save money, and they can be incredibly effective in both the short term and long run.

But let’s face it, unless you’re prepared to go to the extremes – I’m thinking dumpster diving and squatting here – some spending will be inevitable.

Fortunately if you’re savvy about how you spend, you can still save money.

We’re not talking about shopping for deals or discounts codes here, though these are important too, but rather getting cashback on your spending.

What is cashback?

Most people will be familiar with the concept of cashback.

Essentially it’s where you get a portion of the money you spend back either as cash, points, vouchers or some other reward.

There are a few different ways to get cashback (more below), and you can sometimes boost your earning potential by combining them.

Obviously the more you spend the more cashback you’ll get but in some cases you can get cashback without spending a penny.

Four different ways to get cashback

Cashback websites

Cashback websites such as TopCashback* and Quidco* have cornered the market when it comes to online shopping.

To get cashback, you have to register for an account first. Then each time you want to make a purchase, you have to click through to the retailer from the cashback site.

Your movement is tracked using cookies so if you’ve disabled this on your computer then you won’t be awarded any cashback.

Similarly, you might not get cashback if you don’t shop via the cashback site each and every time, or use a coupon issued elsewhere.

The good news is that the cashback you get can be extremely lucrative, especially if you take out insurance, or sign up for a phone, broadband or TV contract.

In some cases, you can also get cashback just by using a comparison site.

In-store cashback

A few years ago TopCashback introduced in-store cashback*. Quidco followed suit, but later scrapped their scheme.

To get cashback this way, you have to register your credit or debit card with TopCashback via your account. It only works with Visa or Mastercard issued cards, and not Amex.

Once you register your card, it will allow TopCashback to track your spending so they can credit you the cashback.

However, the cashback is not automatic. Instead, there are offers on its in-store portal that you have to activate to load onto your account.

So you’ll only get the additional cashback through those retailers rather than across the board.

The offers also change regularly so you have to check back regularly to activate the offers.

Loyalty schemes

Some loyalty schemes have their own shopping platforms that work in a similar way to cashback websites.

The only difference is that you’ll get reward points rather than cash.

British Airways* for example has a shopping site where you can collect Avios points when you make a purchase with one of their partners.

Those points can then be spent on flights or on future purchases.

Cashback from credit and debit cards

Even if you don’t shop online, you could still get cashback.

There are cashback credit cards that give you a percentage back on (almost) everything you spend, such as the Barclaycard Rewards credit card and the American Express Platinum Cashback Everyday credit card.

Amex will also let you load additional cashback offers to your card via the app, which are tailored to your spending habits.

For me that’s included discounts on newspaper and magazine subscriptions as well as hotel and restaurant spends.

It’s worth noting that reward and cashback credit cards often offer better incentives for the first couple of months that you sign up, which is ideal for big spends like if you need to buy furniture.

Be sure to pay the balance off at the first opportunity, ideally when the balance is due, to avoid paying interest.

The Chase current account is the only provider that gives you cashback on (almost) everything when you use your debit card.

Others, such as the Virgin Money current account and Monzo, will give you cashback at selected retailers only. Usually you’ll need to activate the offers on your card to get the cashback.

A note on the almost bit here: the terms and conditions for most cashback schemes will exclude expenditure on things like gambling from earning rewards.

How to maximise your cashback

I’m going to state the obvious here: you can combine the different ways of getting cashback to boost the amount of money you get.

Shopping through a cashback website and using a cashback credit or debit card is the most obvious way of doing this.

You should also compare the different offers available.

TopCashback* and Quidco* have a slightly different set of retailers for example, and they offer slightly different reward rates.

Because of that, it’s worth having an account with both and shopping from the highest paying offer.

If you buy a lot of stuff online, you might want to upgrade your account with TopCashback and/or Quidco.

While you have to pay a fee each year, which is deducted from your cashback balance, you’ll get better cashback offers. 

TopCashback Plus* costs £5 a year, while Quidco Premium* is £1 for every active month.

And when it comes to cashing out, the value changes depending on how you want to cash out.

TopCashback* and Quidco* both allow you to withdraw your cashback directly to your bank account but you’ll get a bonus if you opt for reward vouchers for places like Tesco or Deliveroo.

Things to be aware of

While cashback is definitely a welcome bonus, you shouldn’t let it affect your spending habits.

If you’re using a cashback website for example, the tracking might fail and you might not get the amount of cashback you’re expecting or any at all

So even if you’re using a cashback website, you should still be looking for the best deal.

And if you’re using a credit or debit card, make sure you’re spending within your means and to pay off the balance when it’s due.

Any interest you have to pay on debts would far outweigh any gains from cashback offers.