Most cards now come with a range of extras to
entice you into spending more on the card, the most popular incentive
being cashback. A proportion of your spending (normally 0.5 to 1%) is
returned to you in cash. For example if you purchased something for
£100 using a credit card offering 1% cashback, you would get £1
back. The amount is added up and paid annually, usually on the
anniversary of the account opening date.
To really benefit from a cash back credit card, you must pay off your balance in full each month. By doing so the card company will not make any money from you in interest charges, instead you'll be earning extra money for spending on your card. If you don't normally pay off your balance in full each month, the cashback gained will be dwarfed by the interest charged – in which case you should consider signing up for a low-interest credit card instead.