Free money is not too good to be true

By amending the way you shop and spend, free money is within your grasp!

If someone offered to pay your bus fare, what would your response be? Would you gratefully take their money, and enjoy a free journey? Or would you think they were some kind of lunatic weirdo, and keep your distance?

The eco-loyalty scheme Ice decided to put this to the test, by depositing five women at bus stations up and down the UK, offering to pay the fare of commuters. Each of the women were dressed in a sandwich board that read “Ask me to pay your bus fare and I will”.

Despite the offer, an average of only eight people at each station took up the offer, with thousands of commuters turning their back on the free money during the week-long experiment. When questioned as to why they’d ignored the offer, many said it just seemed too good to be true.

You can see footage of the experiment on the Ice Youtube channel.

It’s understandable to be a little cynical. But there are a few ways that you can make free cash, without doing anything out of the ordinary.

Cashback websites

Before I do any shopping online, I log on to Quidco.The cashback site has relationships with hundreds of different retailers, and offers tracked links to those retailers' websites. By following the tracked link, rather than going to the retailers' site directly, any money I spend is tracked. I then get a percentage of that spend back in cashback!

It’s so easy. Just last month I got £7.50 because of using Ocado for my shopping delivery. The month before I got money back for trying Graze and for using Interflora when ordering flowers. Indeed, since I’ve been using the site, I’ve made more than £130 in cashback, simply by following the tracked links before shopping online.

It’s not just Quidco either – there are loads of different cashback websites out there worth a look, including Topcashback and Kidstart. In fact, you could even get free lottery tickets if you use one cashback site, as we explain in Play the lottery for free!

A word of warning though. Cashback sites are great because you get rewarded for the shopping you were going to do anyway. They are NOT an excuse to spend on things you don’t need, simply for the sake of nabbing extra cashback. And it’s still important to shop around for the best deal – don’t just use a retailer because they are offering a higher rate of cashback.

Cashback credit cards

So, if you make a slight adjustment to the way you shop, you can pocket some free cash. But if you change the way you pay for that shopping, you can get free money too!

There are a number of credit cards on the market at the moment which will give you back a percentage of your spending in the form of cashback.

In fact, one provider just doubled the cashback you can earn in the first three months of using the card. With the American Express Platinum Cashback card, you will enjoy a rate of 5% on all spending in the first three months, up to a maximum of £100 cashback. Any spending after that point earns 1.25% cashback. And each year, to mark your anniversary of taking out the card, your cashback rate doubles for a month to 2.5% (so long as you’ve spent £10,000 on the card over the year)!

However, the fact that it’s an American Express does mean that not all retailers will accept the card. What’s more, there’s an annual fee of £25 to take into account.

A similar offer comes from Capital One, with its World MasterCard. Again, you’ll enjoy 5% cashback in the first three months up to a maximum of £100. However any spending you do within that time period after the £100 cap has been reached will not earn any cashback, unlike the American Express Platinum.

After the initial three months, your cashback is earned on a tiered basis. So if you spend up to £6,000 you’ll get 0.5% cashback, between £6,000 and £9,999.99 you’ll earn 1% cashback, and over £10,000 you’ll enjoy 1.25% cashback.

The third card worth a look is the 123 Cashback card from Santander. With this card you get 1% cashback on all supermarket spending, 2% on department store shopping and 3% on money spent on petrol (capped at £9 per month). There is an annual fee of £24 to consider though.

By looking at the spending you do each month you should be able to work out which of these cards will give you the best return. You can do that by making use of lovemoney.com’s MoneyTrack tool, which aggregates all of your accounts into a single place and categorises your spending, so you can see exactly where your money is going!

Cashback credit cards, like cashback websites, offer you the chance to make a bit of money from spending you were going to do anyway. But you need to be careful. If you are not the sort of person who pays off your bill in full every month, these cards won’t be for you, as the interest you shell out on your outstanding debt will take chunks out of any cashback you may earn.

And again, it’s not an excuse to spend more than you normally would – it’s not worth getting into debt for the sake of an extra couple of quid in cashback!

More: Compare credit cards | Would a simpler tax system leave you better off? | Make your baby a millionaire!