Earn 5% cashback for 3 months and up to 1.25% thereafter wherever you spend with the new Capital One World MasterCard.
What's the deal?
Capital One have launched a new credit card that rivals the hugely popular America Express Platinum Cashback card when it comes to rewarding you as you spend.
The World MasterCard pays a fantastic 5% cashback on all purchases for 3 months and you can earn up to £100 cashback during this time.
There's no limit on the amount of cashback you can earn after the first 3 months but the rate of cashback you'll get will depend on how much you spend.
A rate of 0.5% cashback will be paid on the first £5999.99 you spend (excluding the first 3 months when the introductory offer applies), 1% cashback will be paid on spending between £6,000 and £9,999.99, and a rate of 1.25% on any spending over £10,000.
Any cashback you earn will be credited to your account automatically when you receive your January statement but you'll be able to keep a running total by checking your monthly statements.
What makes it great?
The 5% cashback paid on the Capital One World MasterCard is the best return currently available on a reward credit card.
This makes it an ideal option if you're planning a large purchase in the near future or looking for a way to earn as you spend.
However, what sets this card apart from its rival, the Amex Platinum Cashback card, is simply that it's a MasterCard. This means that you can use it to make purchases and earn cashback whenever and wherever you shop.
American Express still isn't accepted by all retailers so this alone makes the World Mastercard a more flexible option that'll make it easier for you to take full advantage of the introductory 5% cashback offer.
Who would it suit?
To be in with a chance of getting approved for the Capital One World Mastercard you'll need to be aged 21 or over, a homeowner and earning an annual income of £21,000 or more.
You'll also need a very good credit rating, free from any defaults, CCJs or missed payments.
If you're able to meet this criteria then the card is definitely worth considering.
You can either use it to pay for a one off large purchase - like a holiday, or a deposit on a car - or use it to cover your monthly spending while you set aside the cash in a high interest account so you make double the profit until you get your statement.
If you do use the card to make a large purchase and don't have the funds available to clear the balance right away you should consider arranging a 0% balance transfer before you're charged interest.
What's the catch?
A £100 cap applies to the amount of cashback you can earn in the first 3 months and cashback will not be paid on any purchases that take you over the maximum reward.
This limit equates to a total spend of up to £2,000 over 3 months, or roughly £667 a month.
To maximise your return it makes sense to keep track of how much you're putting on the card and switch a different reward credit card (if you have one) to pay for purchases if your spending exceeds £2,000.
You'll also need to be fanatical when it comes to clearing your balance each month.
The card's representative APR is 19.9% so any cashback you earn will be eclipsed if you have to pay interest. Setting up a direct debit to pay off the card in full is an option well worth considering (although you will need to make sure you have the funds available in your bank account).
You should also be wary about using the card abroad, or paying for purchases on foreign websites as an international charge of 2.75% will apply, again affecting the card's profitability.
What's the alternative?
The American Express Platinum Cashback card matches the World MasterCard's cashback offer, paying 5% cashback for the first 3 months with a £100 maximum.
It does, however, offer a more advantageous reward structure after the introductory offer ends; paying 0.5% on spending up to £3,500, 1% on spending between £3,500 and £7,500 and 1.25% on anything over £7,500.
The card also offers a rate of 0% purchases for 6 months which eases the pressure if you're looking to take full advantage of the 5% cashback rate but need to spread your repayments. You will need to make sure you clear the balance, or make a balance transfer before you're charged interest otherwise you'll be hit with a rate of 19.9% APR.
The Amex Platinum Cashback card has more flexible application criteria too as available to those aged 18 and over, earning at least £30,000, with a good (as opposed to very good) credit history.
The downside is that it may not be accepted as readily as the World Mastercard as not all retailers are set up to take payment from American Express cards (although the network is continually increasing).
After the first 3 months there are a couple of other cards that trump the introductory cashback rates on offer from both the Amex and Capital One 5% cashback cards.
The MBNA Amex Cashback card pays an ongoing rate of 1.5% cashback on supermarket and petrol transactions, and a respectable 0.75% rate on all other purchases.
Alternatively, the MBNA Visa Cashback card pays a rate of 1.25% on transactions made at most supermarkets and petrol stations, and a rate of 0.5% on all other purchases.
Given the varying returns on offer and the potential limitations of only equipping yourself with an American Express card it makes sense to use a number of the above cards in combination so that you maximise the return on your spending whenever you make a purchase on a card.
We have done our very best to make sure that the information included in this Deal is accurate. However, sometimes offers can be withdrawn or changed at the last minute so please do check that you're able to redeem this Deal before parting with any money, or going out of your way to take advantage of the offer.
