The card provider has invited 30,000 retailers to partake in its scheme. These retailers will grant users ‘reward money’ at a rate of 1%, which is equal to 1p for every £1 spent in participating stores.
It announced yesterday LA Fitness, YO! Sushi, Firebox.com, Goldsmiths and Nationwide Autocentres are among the national chains to run the scheme. It stresses these are not the only nationwide chains to accept its offer; others have, it just hasn’t announced them yet.
This is important because if enough big retailers don’t sign up, there’s little point to the scheme, especially since other cashback credit cards offer better cashback rates from any retailer where the card is used.
The average rate for a cashback credit card may be 0.5%, but American Express offers 5% cash back.
Its Platinum credit card offerings 5% for three months for those with a household income over £30,000 if you spend up to £2,000.
It then reverts to a standard 0.5% offer on spending up to £3,500, 1% on further spending up to £7,500 and 1.25% on spending over £7,500 per year. Its purchase rate is a relatively high 19.9%.
It also has an Express Rewards credit card similar to the Barclaycard scheme, but the downside is that some retailers do not accept American Express. Its reward points are also awarded in the form of gift vouchers rather than cashback.
Egg Money offers 1% cashback on all spending between £500 and £20,000 per year, although it has a £1 monthly fee. Its APR is 17.8%. These are followed by several deals at 0.5%.
Advice on Freedom: wait and see how many retailers have signed up before setting your heart on this one. I would query why Barclaycard has only announced five retailers now when others have signed up. It may be a PR stunt, to squeeze as much publicity out of this as possible in the run-up to the launch by gradually announcing participating stores, or it could be that others have not fully signed up yet. Watch this space.
Advice on cashback cards: These can be difficult to compare given the different factors involved, one of which is how much you intend to spend on the card per year. Generally, the more you spend, the higher the rate of cashback. Some cards have tiered rates, others have one set rate. Also, beware the relatively high APRs by paying off the card in full each month.
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