Customers spending £500 a month on their credit card could earn up to £131 a year as demands for cashback rewards increases, according to research.
Analysis from Defaqto found that the number of cards available had doubled in the past two years. This has been driven by consumer demand. Only 11 cashback credit cards were available in October 2010, but this figure is now 22.
The report found that for 13 out of the 22 cashback cards available to customers spending £1,000 a month on their card would earn £100 or less in cashback over a year, with some of the lower paying cards only offering 0.5pc.
Customers rated cashback as the third most important feature on their credit card, behind no annual fees and long interest-free periods. Cashback rated second most important with the over-55s.
The author of the report, Brian Brown, said: "Demand from consumers for cashback cards is strong as these cards give a guaranteed benefit with no additional effort, unlike points schemes where the customer has to build up value and then take further action to redeem the points. Cashback can be earned no matter where you shop while points schemes are heavily dependent on where you shop.
The report revealed the maximum that can be earned with points schemes can be as high as £180 a year for a £500 monthly spend, but it cites Which? research showing that one in two card customers never redeem their points.
Mr Brown added: "Card users most likely to benefit from cashback cards are mid and high net worth individuals whose monthly spend would be at a level that would generate an amount of cashback with a significantly tangible annual value. Someone spending £1,000 a month could earn £250 a year in cashback."
To reap maximum rewards from their cashback cards, customers will have to play their cards right. The lowest-paying cards in the market would only earn £30 a year for the same spend. Defaqto's analysis rated Capital One's Aspire World MasterCard [more] and Aspire Elite MasterCard, as well as American Express (NYSE: EXPR - news) 's Platinum [more] , as the best cards on the market.
Customers who spend £500 a month on the American Express Platinum Cashback Credit Card can earn up to £131 a year, and if they spend £1,000 they can earn up to £243.
The new Capital One Aspire Elite card rewards high spenders with 5pc cashback for the first three months, capped at £200, and up to 2pc unlimited cashback thereafter but it does come with an annual fee of £120.
Alternatively, the Capital One Aspire World MasterCard pays 5pc cashback capped at £100 for the first three months and up to 1.25pc unlimited cashback thereafter and there is no annual fee.
Customers spending £1,000 a month in the first year would earn £250 on Aspire Elite and £157 on Aspire World.
Michael Woodburn, Chief Marketing Officer, Capital One said: "It's no surprise that the cashback market is growing as the cards offer fantastic ongoing value and meet a real consumer demand. We know that people want to be rewarded for using their credit card regardless of where they use it so with the chance to earn cashback on all your spending, why would you use any other kind of card?"