By using Halifax's Clarity credit card for both spending and balance transfers, you could pocket £100!
We all like to get something for nothing, particularly in January when finances are traditionally a little tight. As a result Halifax has turned a few heads with a new offer on its Clarity credit card, which the bank reckons could see you pocket £100 in cashback, simply by using the card for both spending and balance transfers.
£5 a month for spending
The Clarity credit card already offered users a way to pocket some cash.
Each month cardholders spend £300 on the card, they are rewarded with £5 in cashback. Do that every month, and over the course of a year you’re looking at a return of £60.
Plus an extra £40
However, the new offer could top that up with an extra £40 a year, by using the card for balance transfers too. Anyone who takes out a new Clarity card before 19 February will qualify for £5 cashback for every £500 transferred onto the card, up to a maximum of £40.
So all you need to do is transfer £4,000 in debt onto the card and spend £300 a month with it, and you’ll be pocketing a cool £100.
The catch
The trouble is the card is not available to everyone. In fact, only holders of Halifax’s Reward Current Account can get their hands on the card.
[SPOTLIGHT]Now, there are worse catches to deal with – the Reward Account is fantastic, and offers you the opportunity to pocket £60 a year in cashback even if your finishing balance each month is £0, a pretty nifty deal in my view. And right now you'll also get a £100 welcome bonus if you switch to the account. But if you don’t fancy switching, you won’t be able to take advantage of this offer.
Better balance transfer deals
The Clarity credit card charges an interest rate of 12.9% APR. While that’s better than the rate of interest on many credit cards, it still lags behind the best low APR cards, which I highlighted in Why you don’t need a 0% credit card. Sure, you can get £40 in cashback from the Clarity account. But you’ll be paying 6% more in interest than with the Sainsbury’s Low Rate card!
Besides, if you have £4,000 (or more) on a credit card and need to clear it, you’re probably better off making use of a 0% balance transfer card. OK, so there won’t be any cashback to enjoy, and you’ll have to pay a fee to transfer that debt (something you don’t have to do with the Clarity card) but the debt will disappear quicker and cost you less in the process.
For more, read 12 brilliant balance transfer cards for 2012.
Earning cashback on your spending
One nice thing about the Clarity card is that even if you don’t do too much spending on your credit card, you still get a solid enough return in the form of a £5 cashback payment each month you spend more than £300.
However, there's a few specialist cashback cards which are worth a look, particularly if you tend to spend more than that each month.
The largest cashback rate comes from the Capital One World MasterCard, which pays a whopping 5% on purchases for the first three months (up to a maximum cashback of £100).
After that, tiered cashback rates apply, depending on how much you spend on the card. So if you spend less than £6,000 you’ll earn 0.5% cashback, between £6,000 and £9,999.99 you’ll earn 1%, and should you spend more than £10,000 you’ll enjoy a return of 1.5%.
Then there’s the American Express Platinum cashback card, which pays 2.5% cashback in the first three months up to £100, then 1.25% thereafter. What’s more there’s an annual bonus rate of 2.5% for one month to mark your anniversary of taking out the card. How romantic! However, you will need to shell out a £25 monthly fee for the pleasure of this card.
Finally there’s the Santander 123 cashback card. As the name suggests, you’ll earn either 1%, 2% or 3% cashback, depending on where you do your spending. So you’ll earn 1% on supermarket spending (with no cap), 2% on department store spending (with no cap) and 3% on fuel spending (capped at £9 per month).
It can be a little tricky to compare cards like this, so be sure to read New cashback card shakes up the market to help you work out which card will be best for you.
And remember, while it's a smart move to put all of your monthly spending on your cashback card to maximise your return, that doesn't mean you should spend more than you usually do! Also, be sure to pay off your bill in full each month, otherwise the interest you pay will soon trump any cashback you earn.