Lloyds Bank cashback credit card review

Earn up to 0.5% back with this Mastercard

This brand new cashback card from Lloyds Bank offers the highest cashback rate on non-American Express cards.

Here’s what you need to know about the card and whether you should get it.

How the Lloyd’s Cashback credit card works

This latest addition to the reward credit card world can earn you up to 0.5% cashback. For the first £4,000 spent every calendar year you’ll earn 0.25%. Any spending on the card above this will earn 0.5%.

There’s also a welcome bonus if you spend £1,000 in the first 90 days. This is worth £20.

The card is a Mastercard, meaning it’ll be accepted by most retailers.

Here are the essential details:

Lloyds Cashback Credit Card

Cashback rate0.25% on first £4,000 spend each calendar year
0.5% on spending above £4,000 each calendar year
Cashback capNone
Cashback paidEvery January to card
Welcome bonus£20 if you spend £1,000 in the first 90 days
FeeNone
Interest19.9% APR

Cashback is earned on most purchases, but not balance or money transfers, cash withdrawals, gambling, payment protection transactions or account fees.

How Lloyds’ cashback card compares

Lloyds Cashback card vs American Express cards

Even at the top rate of 0.5% on the larger spend, this cashback card is easily beaten by a number of Amex credit cards.

The Nectar Amex earns 2 Nectar points per pound, worth 1%. Cards which earn Membership Reward points can be worth 0.8% if converted to Avios points and then Nectar points. The free Platinum Cashback Everyday card earns 0.5% on the first £10,000 spent, then 1%.

Here’s more on the top American Express reward and cashback credit cards.

Lloyds Cashback card vs other Visa and Mastercard cards

The best everyday spending rate on other credit cards matches Lloyd’s basic 0.25%. None go higher on general spending, so if you do get into the 0.5% tier you’ll earn more.

However, there are higher rates available with specific retailers. John Lewis’s Partnership card offers 1.25% back at John Lewis and Waitrose, while the Amazon Platinum card gives Prime members 1.5% back at Amazon.

The big difference between the Lloyds card and these store credit cards is that you earn actual cashback, paid yearly. The other cards earn points which are transferred into vouchers when you hit certain thresholds. This could mean you are waiting a while before getting the payout, or never even reach those levels.

Another card worth mentioning is the Barclaycard Rewards credit card. Though this is a flat 0.25% back everywhere you can use it abroad fee-free, and still earn cashback.

How much could you earn?

Not including the £20 bonus, here are some example spends and the value of the cashback earned in a calendar year.

SpendCashback
£4,000£10
£5,000£15
£7,500£27.50
£10,000£40

Technically though you need to compare this return to waht you’re already earning if you have a card that pays 0.25%.

For every £100 over £4,000 you’ll earn 50p rather than 25p. So each grand spent is worth £2.50 more than sticking with a card that only pays 0.25%.

Not to be sniffed at, but it’s not going to change your life. And obviously the more you spend above £4,000 the more you’ll make.

Is the Lloyds Cashback credit card any good?

Broadly, it’s a decent card – especially if you don’t currently have a non-Amex rewards credit card. It’s worth looking at the bonus and ongoing cashback separately.

Is the bonus worth it?

The £20 bonus for a £1,000 spend in 90 days is the equivalent of 2%, and that’s on top of the 0.25% you’d earn on those purchases too. The actual return on that grand spent will be £22.25, or 2.225%.

So this makes it better than all the other cashback and reward credit cards – unless you could also qualify for an American Express welcome bonus.

Is the ongoing cashback worth it?

At first the extra tier of cashback makes this card appear to be an obvious top choice after the higher paying American Express cards. But I’m not actually sure most users will spend enough on the card to achieve that higher rate of 0.5%.

To jump above the £4,000 bracket you need to spend £333.33 a month on average over a year. Though this might sound easy to hit if you put all your spending on the card – don’t forget you’ll want to put as much spending as possible on the American Express. So you’re only going to use this card at a handful of retailers which only accept Visa or Mastercard.

I’ve had a look back at my non-Amex credit card statements to see just how much I spent with different cards. Excluding the Waitrose purchases (where I get 1.25%), my spend totals £225 in last quarter.

Over a year that would be £900. In total I’d make just £2.25 over 12 months with the Lloyds card and stay at the basic 0.25%. That’s no different from what I’d earn with my existing John Lewis & Partners reward card.

Yes, we’re still in the midst of the pandemic so spending isn’t back to normal, and I’d expect to put more on a non-Amex. But another £3,100? I think that’s unlikely.

And even a large purchase from a retailer not accepting Amex might not be possible as it all depends on the credit limit.

Plus, you need to reach this threshold in a calendar year. If you opened the card up when it launched in late July 2021, you’d only have five months to hit £4,000 which is £800 a month.

Should you get the Lloyds Cashback credit card?

First of all, getting an American Express reward credit card will earn you much more money. So prioritise that.

Then it all comes down to how much you think you’ll spend on the card, where you shop and if you already have a Visa/Mastercard reward card.

No, don’t get the card

  • If you shop at a retailer which offers a higher rate for spending with them
  • If you already have one of the other Visa or Mastercard reward cards and don’t think you’ll spend more than £4,000
  • If you’re going to spend overseas then the Barclaycard Rewards is a better option

Yes, do get the card

  • If you are confident you will spend more than £4,000 between January and December each year with shops and businesses that don’t accept American Express and don’t have their own enhanced reward credit cards

Andy’s Analysis

When I saw the news that Lloyds had launched this card I got a little excited. But delving into the details more and I just can’t see how it’ll earn me any more money than the cards I already have.

So for now (at least), I won’t be adding this card to my wallet. But I’m keen to see if other providers begin to increase their cashback rates in response. If they do, I’ll update you here.

6 thoughts on “Lloyds Bank cashback credit card review

  1. Hi Andy,

    One thing I clued up on a while ago was Amex gives cash back on whole pounds for each transaction certainly that is how it seems when one looks at the cashback on each transaction so in theory if one spends £100 in a month at 101 99p transactions it would result in no cashback at all for that month! I am lucky enough to still have a Barclaycard cashback credit card which used to be 1% (I dumped Amex at that time as visa was accepted at more places and was still 1% ) but is now 0.5%, they appear to calculate the cashback on the amount spent per month so spend £100 in a month results in 50p which can be claimed that month not waiting a year. As Amex has now effectively gone to 0.5% for many given the roundings it may actually not be as good as Lloyds if it turns out Lloyds operate on the whole monthly spend like the Barclaycard I have. Little things like this can actually cost a lot in the long run in terms of cashback. I know shop small on Amex is a plus but the unreliability of it with merchants in my experience makes it more trouble than it is worth in some cases, Amex washed their hands of it as I’ve found a few times! Cheers Mark

  2. Ok, your numbers are all wrong. In your preamble you say “For the first £4,000 spent every calendar year you’ll earn 0.25%. Any spending on the card above this will earn 0.5%”, however in your first table it says the 5% rate is for any spend over £5000. I assume that’s just a typo mistake as it wouldn’t make sense.

    Then in your table of returns, you do indeed add the correct amount relating to 5% of the £4000-£5000 band, but then go wrong again as there should be £27.50 for £7500, and £40 for £10000.

    I feel an appropriate charge for this kind of rectification should be £40, thanks!

    1. And of course there I go saying “5%” twice when it’s obviously “0.5%”. I’ll knock 10% off my fee, so £36.

      1. You can pay me by PayPal to this email address. Thanks

  3. I am planning to do a big purchase next year.

    Is it worth it to wait to get the Amex then? As I don’t think I can spend enough to get the extra cash in the first few months.

    1. Hi Justin, I think it probably will. You will miss out on the ongoing 1% cashback from the Nectar Amex in that time as well as extra offers, but it’s unlikely you’ll spend enough to match the welcome bonus return when you do make the big purchase next year.

      You could go for a smaller welcome bonus -eg the Amex Platinum Cashback Everyday card will give 5% on the first £2,000 spent. So even if you spend less you’ll still get the 5%, unlike with the Nectar and Preferred Reward Gold cards which require a threshold spend to trigger the bonus.

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