Credit cards good for saving money

Published on 1 January 1970 by Raffick Marday

With interest rates being kept at 0.5 percent, savers may want to look at other ways to make the most of their money.

Ironically, one method could be using a credit card, rather than just letting interest slowly accrue in your account.

However, this only happens in the form of cashback, so Britons will have to spend money to make money.

Some card providers offer consumers 1 percent cashback on what they buy, whereas some savings accounts only offer a rate of 0.1 per cent. On top of this, cashback rewards are not taxed.

As a result, spending £5,000 with a 1 percent cashback credit card could earn £50, whereas if someone in the top tax bracket saved £5,000, they would only see a return of £2.50.

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