Capital One: the best cashback credit card around

The Capital One Aspire World MasterCard is the best cashback credit card around for typical borrowers.

That's the findings of a new study by financial analysts Defaqto, which crunched the numbers to see which of the 22 cashback cards on the market offers the best return.

The best cashback credit cards

Defaqto split the various cashback cards into three categories: standard (those not charging a fee), platinum (those charging a fee) and Premier (those at the very top end of the spectrum for very big spenders).

These are the cards that came out on top according to Defaqto's calculations:

Standard: Capital One Aspire World MasterCard

Platinum: American Express Platinum Cashback card

Premier: Capital One Aspire Elite MasterCard

Let's take a look at what each of these cards offers, to get a better idea of why they did so well.

Capital One Aspire World MasterCard

The Capital One Aspire World MasterCard pays 5% cashback on all purchases during the first three months, capped at £100 cashback. After that you enjoy tiered rates depending on how much you spend.

Spend up to £6,000 and you’ll get 0.5%, up to £10,000 and you’ll get 1% and spend more than £10,000 and you’ll enjoy 1.25% cashback.

American Express Platinum Cashback

The American Express Platinum Cashback card also pays 5% in the first three months, though this time it’s capped at £125 cashback.

After that point you’ll earn a flat rate of 1.25%, while each year, to mark your anniversary with the card, that rate will double to 2.5% for a month.

The annual fee is £25.

Capital One Aspire Elite MasterCard

This is not a cheap card, with an annual fee of a whopping £120. It does offer the chance of a great return for big spenders though.

You won’t be surprised to hear that it offers 5% cashback over the first three months, though this time that cashback is capped at £200.

After that you enjoy a flat rate of 2% cashback. On top of the cashback, you’ll also enjoy a concierge service, with staff on hand to help you find rental cards, pick the perfect present (they’ll order and deliver it on your behalf), even help book you a spot on the golf course!

Why these cards did so well

Defaqto worked out the cashback you could expect to earn from the various cashback credit cards on the market when the study was undertaken. Here’s how the various standard cashback cards performed in terms of annual cashback across various average monthly spends

*Cashback paid to charity rather than you

As you can see, for very small monthly spending, the Aqua card from SAV offers a hell of a return. But once you get beyond a monthly spend of £500 you are far better off with the Capital One Aspire World card than any of its rivals.

Now let’s take a look at Platinum cards

Here it’s clear that the Leeds card is one to miss. And the more you spend, the more significant the gap is between the American Express card and the Barclaycard.

The only card in the Premier category was the Capital One Aspire Elite, so no surprise that it won! Here’s what cashback you’d make with the card

So, Capital One’s two cards are pretty great options right?

My issues with the results

There are a few things worth mentioning before you rush off to apply for a Capital One cashback card.

Firstly, the research was paid for by Capital One. That doesn’t mean that the sums are rigged – the Capital One cards are genuinely good. But Defaqto trumpeting how great Capital One’s cards are, having been paid to do the sums, just makes me uneasy.

Secondly, the Santander 123 card is missing from the tables above. To be fair to Defaqto, it included a big section in its full cashback report explaining why – namely, the card is just too complicated to analyse alongside the others. And it worked out the cashback you can make with the Santander card, broken down by income bands.

The point is that precisely because the Santander card is so unique – paying different rates of cashback depending on where you spend your money - you really have to do your own calculations to see whether it’s the best card for you.

Finally, my biggest issue is a card that isn’t mentioned at all in the research – the fee-free American Express Platinum Cashback Everyday card. Presumably it’s not mentioned because it was launched after the research was undertaken. However, given the report has only just been published and the American Express card was launched on the 24th October, it shouldn’t have been out of the question to update the results.

However, that may not have led to such a good result. The American Express Platinum Cashback Everyday card pays 5% cashback on all spending up to a maximum £100 in the first three months, and then tiered rates after that depending on your spend. But the tiers are far more attractive than Capital One’s. You get 0.5% for spending up to £3,500, 1% for spending up to £7,500 and 1.25% for spending over £7,501.

Ok, so you won’t be able to use the card in quite as many shops as you can the Capital One card, but I know which one I prefer.

More on credit cards:

The best low-fee balance transfer credit cards

The best reward credit cards

The best 0% balance transfer credit cards

The best cashback credit cards