Lloyds Bank launches cashback credit card that pays up to 0.5% - plus a £20 introductory bonus

As with all cashback and reward credit cards, make sure you repay the balance each month IN FULL to avoid paying interest, which can often wipe out any bonuses you've earned - and never use cashback and reward cards as an excuse to overspend. See our Credit Card Rewards guide for more info. 

How Lloyds' new credit card works

Here are the key features of Lloyds' new 'Cashback' credit card, which can be taken out by both existing Lloyds customer and non-Lloyds customers, so long as you pass its lending criteria:

• You can earn 0.25% cashback on all spending up to £4,000 within a calendar year and 0.5% cashback on all spending of £4,000 and above. Any cashback you earn during a calendar year is automatically added to your credit card account the following January and goes towards paying off your balance. 
  
  
• You'll get a £20 bonus when you spend £1,000 in the first 90 days of card membership. If you hit the threshold the bonus will automatically appear on your cashback balance within 12 days of the 90 day period ending, but you won't actually receive the money into your card account until the following January, along with any other cashback you've accrued.
  
  
• The card doesn't have a monthly or annual membership fee-free but it charges 19.9% rep APR. So ensure you repay in full each month. 
  
  
• It's a Mastercard, which means it should be widely accepted by UK retailers. You shouldn't use the card abroad though, as you'll be subject to non-sterling transaction fees. The cheapest way to spend on holiday is using the right plastic - see our Top Travel Credit Cards guide for several fee-free options.

How Lloyds' cashback card compares

Multiple providers offer cashback credit cards, which give holders a certain percentage of their spending back when they use the card. Lloyds' new offering will make it into our best buys but it can be beaten by two American Express (Amex) cashback credit cards, which pay a higher rate of annual cashback into your credit card account.

See the table below for how all three cards stack-up, although bear in mind that not all retailers accept Amex.