Lovemoney Awards 2010: cashback credit cards

We announce the cashback credit cards that knock your socks off!

The best financial products are the ones that do what they say on the tin, and work well in practice as well as on paper.

Here at lovemoney.com, your opinion matters. So we recently asked you to tell us which credit cards, current accounts and savings accounts ticked the right boxes for you.

Here, I'm going to announce the overall winner - and the two runners-up - in our 'cashback credit cards' category. I'm also going to highlight the features which led you to decide that these three cards were the pick of the bunch.

Runners up

In third place, it's Egg which offers the fabulous Egg Money World MasterCard.

Why you gave this card a Cheer Award

The Egg Money World MasterCard has a typical APR of 17.8%, and offers a very attractive 1% cashback on all spending, up to £200 per year.

Used correctly, this card could be the cashback solution you're looking for. However - as always - there are several things you need to bear in mind.

The first is that the Egg Money World MasterCard charges a flat fee of £1 per month. As Szu Ping Chan explains in Top reward and cashback cards, that means you'll need to spend at least £1,200 each year - just to break even.

The second important point is that you'll need to spend a minimum of £500 a year using the card. If you don't, you won't qualify for any cashback.

Runners up

In second place, it's the Co-operative Bank, with its Members' Visa card.

Why you gave this card a Cheer Award

This cashback card hasn't received much publicity, probably because it's only available to members of The Co-operative Group Limited. 

However, if you're willing to become a member of the Co-op, this card will give you a good and consistent rate of cashback, along with other benefits.

In a nutshell, you'll receive 1p cashback for every £1 you spend on the card in The Co-operative Food stores (1% cashback), and 1p cashback for every £2 you spend anywhere else (0.5% cashback). There is no annual fee, and no limit on the amount of cashback you can earn.

The Members' card also offers you 0% interest on both balance transfers (3% transfer fee applies) and purchases for the first six months, after which the typical rate is 15.9% APR.

These are unusual benefits for cashback cards to have. The 0% purchase period means you can buy something using the card and take six months to clear the balance before interest starts to kick in. And you can earn some cashback at the same time!

Just make absolutely sure you're able to pay off the debt completely before the 0% period comes to an end. If you don't, the interest you end up paying will almost certainly outweigh any cashback benefits accrued.

Finally - because you'll be a member of the Co-operative 'family' - you'll also receive a share of its Group profits twice a year. All the cashback you earn will be added to your share of these profits and will be paid to you at the same time.

The winner is...

The gold medal 'winner' award, as chosen by you, goes to American Express for its Platinum Cashback Card. 

Why this card is best

The main benefit of the table-topping American Express Platinum Cashback Card - which has a typical APR of 19.9% - is the juicy rate of cashback it initially offers. For the first three months, it offers a whopping 5% cashback on all purchases, up to £100.

Thereafter, you'll get 0.5% cashback on the first £3,500 of spend, 1% from £3,501 to £7,500, and 1.25% from £7,501 upwards. There is no annual fee.

As always, you'll need to decide whether this card suits your personal circumstances. For a start, you'll need to be earning at least £30,000 a year to apply for it. And you'll have to spend at least £3,000 per year on it, or it won't pay you any cashback at all.

Finally, bear in mind that American Express still isn't accepted by some small or independent stores and restaurants.

Overall, I think this card is definitely a cashback winner for the first few months of use. To make the most of its three-month 5% deal, it makes sense to apply for the card just before a period of high spending. That could be anything from booking a family holiday to buying a yearly travel card.

Happy earning!

Get help from lovemoney.com

If you need a bit of help sorting out your credit cards, you've come to the right place.

First, adopt this goal: Pay off credit card debts

Next, watch this video: How to make your credit card your servant and not your master

And finally, why not have a wander over to Q&A and ask other lovemoney.com members for hints and tips about what worked best for them?

More: The best credit card in Britain | The most loved credit cards in Britain