Capital One has launched two new cashback credit cards. But how do they stack up against the other big reward players?
Capital One has long been something a big fish in the cashback card pond, thanks to its World MasterCard. And that’s why why it was something of a shame when the account vanished earlier this month. But fear not: the World MasterCard is still around, in all but name.
Two new cards have now been launched by Capital One: the Aspire World and Aspire Elite. Which is the rebranded World MasterCard? Well, the clues in the name…
5% initial rate
Both cards pay 5% back for the first three months, but the maximum level of cash you can get back varies between the two deals. The Aspire World lets you earn £100 within these three months – that’s £2,000 of spending (identical to the World MasterCard). The Aspire Elite allows you to earn £200 – a reward level that requires £4,000 of spending.
After these three months, your aggregate spending total will go back to zero and regular cashback rates will apply. This is where the two cards start to vary more substantially.
Aspire World
The Capital One Aspire World has three staggered cashback rates and no limit to the amount you can earn. Aggregate purchases up to the £6,000 mark will earn 0.5% cashback. This increases to 1% when you spend £6,000 and 1.25% when you spend more than £10,000. And if all this sounds familiar, it’s because these are the exact same levels the old World MasterCard had.
The rates are not applied retrospectively. So while the cashback level you earn will change as the overall amount you spend increases (regardless of how much you pay off each month), the rate will only apply to new purchases. If you stop spending, you stop earning.
The amount of cashback you have earned each month will appear on your statement, and the sum total will be credited to your account in January. When you reach the card anniversary date, your spending total will go back to zero and you will earn cashback at the standard staggered rates once again, starting at 0.5%.
The card has a representative APR of 19.9%, no fee, and comes with Capital One’s ID Alert: a service that will warn you if someone applies for credit using your name. It also gives you two free Credit Reports with Equifax every year.
But Capital One is relatively picky when it comes to its cashback cards. To get the Aspire World you will need to be aged 21 or over, have held credit cards in the past, own your own home and have an income of more than £20,000 per annum.
Aspire Elite
The Capital One Aspire Elite also has three staggered rates after the initial three months are up, but the levels are higher. You’ll earn 1% cashback on all purchases up to £15,000, after which it increases to 2%. However if you exceed £50,000 of spending your cashback rate will actually drop to 1.35%.
[SPOTLIGHT]The Aspire Elite comes with a concierge service that can arrange anything from restaurants to flights, as well as Capital One’s ID Alert and Retail Protection that provides cover for many of the purchases made on the card from accidental damage, fire and theft. There’s also an extended warranty for a wide range of electrical goods. However, don’t just assume everything you buy on the Elite is covered, read the terms and conditions fully and if in doubt check with Capital One.
The downside to this deal is that it does have a £120 annual fee. Indeed, the Elite card is really geared up for big spenders. If you’re just after something to fund the weekly food shop or petrol spend with, the World account is probably a more suitable option.
As with the Aspire World card, to get the Elite you will need to be aged over 21, have had credit cards in the past and own your own home. The salary limit to be eligible for this deal is set higher at £50,000 per annum and the representative APR is 19.9%.
So how do other cashback cards stack up against Capital One’s offering?
Big spender alternatives
The American Express Platinum Card offers 5% cashback in the first three months, up to a limit of £100. After this, you will earn 1.25% cashback on all spending, with no limit. What’s more, you’ll receive 2.5% in the anniversary month of your taking out the card, so long as you have spent more than £10,001 in the preceding 12 months. The card also comes packaged with travel and shopping protection and has a representative APR of 18.5%.
However the card does have a fee - £25 per year – and you will need to have an annual income of £20,000, with no history of bad debt to qualify.
Again, this is a card for bigger spenders. You ideally need to be spending £1,000 per month or more to cancel out the monthly fee and make this card a better deal than the Aspire World. Purchasing at this level will also qualify you for the 2.5% bonus rate in your anniversary month. However if your monthly spend is higher at £1,250 per month, you’ll be better off going for the Capital One Aspire Elite over the Amex deal – even with the £120 annual fee.
Domestic alternatives
Santander’s 123 Credit Card is geared up for more every day, domestic spends. You will earn 1% on supermarket spending, 2% in department stores and 3% at petrol stations (up £300 spending a month: £9 cashback). However the card does have an annual fee of £24.
Now, this card is a good get if you spend a lot on petrol – use your full £300 per month allowance and you will earn £108 every year. That’s £84 after the fee. The three month promotional rate on the Capital One Aspire World will of course allow you to earn £100 if you can spend £2,000 in three months. But after this, you’ll need to put around £450 or so on the plastic every month to keep up pace just with the petrol element of the Santander card. You can actually dodge the annual fee in the first year too, if you also open the 123 current account. For more on this account, check out Santander 123 current account pays cashback on your direct debits!
AA’s credit card is another worthy choice for petrol-heads. However you will earn reward points back to spend on motoring products and services, as well as AA Home or Car Insurance, shopping vouchers or nights out.
The golden rule of using a cashback card
And finally, if you do get a cashback credit card, remember to always clear off your balance every month. If you don’t, pricey interest rates will kick in and the charges will eventually outweigh any cashback earned – undermining the whole exercise!
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