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| LUMA Cashback a good deal |
(not to be confused with the LUMA 'rewards' credit card or the basic LUMA credit card)
Link : Luma Cashback Card website
January 2014 update : Cashback card suspended.
The card was only available for about 4 weeks. It looks like it may not be back.
Updates... If the link says the cashback card is not available but you can choose the rewards card or basic card, my advice would be not to bother as the rewards or basic card are not much use and neither has cashback.
Without the cashback, the LUMA card is perhaps only any use if you cannot get a credit card with a much lower APR%. Luma and Capital One credit cards tend to be at the 'highest' level of APR% along with Aqua cards, so you only want to be with them if no other option exists.
The main basic details (as of 16 Nov 2013) :
No annual fee
Seems to be part of the Capital One credit group (well-known and trusted)
Those with poor credit rating or low income have a good chance of approval
Typcial credit amount is between £200-£1500
35.9% APR
Online account (possibly can pay other methods too)
Contactless card
Free fraud protection
The Main reason everyone in the UK should take this card :
At many well-known stores and petrol stations, they give 4% cashback on things like groceries and petrol bought with the card (up to a maximum of £225 month, meaning a potential saving of £9 a month).
There is list of participating shops and petrol stations which seems to include the well-known stores such as Asda, Tesco etc. Full details here : List of shops for LUMA cashback
How to use the card sensibly :
There's only one real rule for this : pay off the monthly balance in full each month !!!
Then you pay no credit.
Or you will be hit with a 35.9% APR. Still better than payday loans but it's a lot.
Oops ... another rule. Only use it for purchases. Not for cash withdrawals etc.
The card is intended for people with poor credit ratings or on low income who would normally have very little chance of getting a credit card. It is termed a 'credit building' credit card. But the 4% cashback is so good it must make it one of the best cashback credit cards there is and in my opinion probably a card every UK household should have.
So get yourself a LUMA cashback card and use for your usual shopping then pay the monthly balance in full each month. Even someone on the £200 minimum credit could almost get the full £9 saving each month. The maximum credit seems to be £1500,so it's no use for anything over £1500.
Future reasons to bail out :
If they add an annual fee (but the savings might still make it worth it)
Any other changes which make the card less attractive than the cashback
Note :
There is also a LUMA Credit Card website, which offers 'rewards'. However these rewards are very poor. I don't know if this card has now been superceded by the 'cashback' card, or both are different options, but whatever you do, for now make sure you are applying for the CASHBACK card.
What other sites are saying about the cashback card :
Daily Mail 'This is Money' Nov 2013
Moneysavingexpert forum thread
Note : If you intend to always pay off the debt monthly before accruing any debt interest (which should be the aim), it may be best to pay by direct debit. But always be sure you have enough in your current account to cover the payment (you don't want an overdraft bill). Or just make sure you always pay off the montly debt before the due date.
The main point of using the card is to pay for groceries etc and get a 4% cashback. So pay the bill before the monthly due date.
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