NatWest and RBS offer new cashback card

The Cashback Plus credit card promises up to 1% cashback with no cap on how much you can earn, but are there catches?

NatWest and Royal Bank of Scotland have launched a new credit card paying up to 1% cashback with no limit on how much you can earn.

The Cashback Plus card pays 1% cashback on spending at supermarkets and the likes of Cineworld, Caffe Nero and New Look.

For all other spending you'll get 0.5% cashback, although you can boost this to 1% until 31st March 2015 if you pay using the card's contactless technology.

However, the card charges an annual fee of £24. It has a representative APR (the annual combination of interest and fees you'll be charged if you don't pay off your balance in full each month) of 17.4%.

What to do with your rewards

Once you’ve reached £5 in rewards, there are three ways you can redeem your rewards from the Cashback Plus card.

You can turn your rewards into cash and transfer it to your NatWest/RBS personal current account (if you have one). Otherwise, you can use it to go towards your credit card balance.

You can exchange rewards for gift cards or tickets from selected retailers.

Or if you’re feeling generous, you can donate your cashback straight to Barnardo’s, Cancer Research UK, Macmillan Cancer Support or the NSPCC.

The other cards

There are plenty of other cashback cards on the market currently, and almost all of them pay much better rates of cashback than the new NatWest/RBS card.

For example, there's the American Express Platinum Cashback Everyday Card, which pays a far more impressive 5% cashback in the first three months (capped at £100 cashback). After that, you enjoy anything from 0.5% to 1.25% cashback, depending on how much you spend over the year. What's more, it's fee free. It comes with a representative APR of 19.9%.

Then there's the Santander 123 Cashback card. Here you earn 3% cashback on petrol and travel purchases, 2% on spending at department stores and 1% on supermarket spending. It has an annual fee of £24, and a representative APR of 16.5%.

Getting the most from a cashback card

Cashback credit cards can be a great tool, so long as you pay your balance in full each month. Otherwise any cashback that you earn will be eroded by interest charges. The way to get the best return on your card is by using it as a regularly as possible. That means putting all of your usual spending on the card, but it's not an excuse to go mad and spend more than usual!