I'll think of a good title later

I found out about Top Cash Back through www.moneysavingexpert.com. I've been a member since late October.

There are a number of cash back websites available each offering the same service. Vendors pay a commission for every lead the cash back service provides, the cash back service then passes this commission on to you. The vendor gets a sale, the cashback service makes money either through keeping a bit of the commission &/or through their own advertising & finally the customer effectively gets paid to shop. Top Cash Back is one of the biggest & most popular cash back websites in the UK.

So far I have 'earned' £79.87 through Top Cash Back. I knew I was never going to get much money because I don't buy much stuff.

The majority of that money has come from 3 vendors:

I opened a current account with Alliance & Leicester, I have already received £100 as a switching bonus & am due to receive a further £50 in March through Top Cash Back, all for switching my bank account (to a much better account too).

I have £5 pending simply for signing up to 4 free issues of Time magazine. Time were very prompt in delivering the first issue which was ok but I thought Time was an international magazine, I had no idea it was so US-centric, I doubt I will be making a subscription.

Photobox were very good. I ordered some prints from the falconry day that Nicky treated me to in September. You just select what size prints (or a number of other gift items ranging from albums to pillow cases) you want & they print & post them to you. The service was very quick, the 50 free prints was a nice surprise & meant that I only had to pay postage. Thanks to the extra £6 cash back I turned a profit on the transaction. The only downer was the checkout didn't work with Opera . However, I will definitely be using them again.

Daily Clicking

The rest of the money I accrued from 'daily clicking'. A number of the merchants on these cash back websites give you a few pennies if you make a search through their website then click through to a vendor, you are often limited to a 1 or 2 clicks per day. To my shame I spent roughly a month & a half as a dedicated daily clicker before I decided it was a complete waste of time.

Firstly the search engines of the websites offering daily clicks (with the possible exception of Kelkoo, who have now entered the cash back arena as well) are truly awful. Most could not find porn on the internet.

Unless you know what you are doing & know which cookies to clear at what time the daily click websites are notoriously bad at tracking. Often your search doesn't register, so your bandwidth counts for nothing.

Even when everything works as it should the return on your time is a few pence a day. Looking back daily clicks could make you a lot of money, but now though I think the vendors have learned that daily clickers have no intention of buying what they search for (read some of the comments against each vendor) & have massively reduced their payouts.

To borrow a well known phrase, money acquired through daily clicking is only free if your time has no value.

The Big Wins

I still think that everyone in the UK should sign up purely to take advantage of the few big wins. There are some pretty big cash back payouts for car & home insurance in particular, other financial products like savings accounts & also for switching your gas & electricity supplier. For example Co op insurance are offering £70 for new car insurance policies.

The rules for happy cash back service use

Don't bother daily clicking, it's really not worth the effort.

Only use cash back websites for things you are going to buy anyway.

Don't buy something just because you get cash back, even if the price you pay is less than the advertised cash back rate. Transactions can & do fail to track, & although you can put in a manual claim these will go no where.

For the same reason don't pass up a cheaper vendor in favour of a more expensive vendor that is offering cash back.

Think of cash back as a nice bonus. But don't consider it your money until it is physically in your account.

Be patient. In some cases money won't become payable for six months or more.

In June this year I signed up to Zopa as a lender after readng about it on one of those personal finance blogs. Zopa stands for Zone Of Possible Agreement. Zopa is an online marketplace (NOT a bank) that puts people who want to lend money in touch with people who want to borrow money. How does it work? You deposit your cash into an account & set the rate that you want to lend at. You can do this in several different markets. Each market is divided by credit worthiness - A* at the top down to C, plus a special market for young people who don't have much of a credit history. There are 2 markets for each category split by the length of the loan - 36 & 60 months. Zopa does all the identity checking, credit checking & risk assessment for you. There is also a section called the 'Listings' where people get to pitch their loan request to you 'Dragon's Den' style. I'm sure there are some valid loans listed but being the cautious fellow that I am I stayed well away from them. Apart from reading a few for entertainment purposes. Posts in the user forums tend to validate my decision. Each individual loan is spread across loads of borrowers. By default the amount you lend to an individual is £10. So if an individual defaults on a loan the most you will lose on that loan is £10. This is a great way of spreading the risk. Historically Zopa has very low default rates, & is very open & up front with all its data. What's in it for the lender? Interest rates on savings accounts are currently very low. I've got my money in one of the highest rate accounts which is set at 4.35% AER. However, banks lend the exact same money (The banks also lend money created out of thin air, but that's another kettle of fish entirely) at 10%+. The idea is that by cutting out the middle man you can enjoy the fruits of the spectacularly high interest rates that have made bankers rich. What's in it for the borrower Individuals have less overheads than banks (or is it that they are just less greedy?) so borrowers also often get a better deal than they would at a bank especially if they have a good credit rating. What's in it for Zopa? At the time of writing Zopa charge the borrower £118.50 per loan, & charge the lender 1% of the amount loaned out. Pitfalls for the lender Zopa is very good at being up front about the whole process, but I'm going to spell them out a little more directly. Your money is not held by Zopa the company. Unlike a regular bank account your money is physically lent out to the borrower. So you have to wait for your money to be repaid to you before you can use it again. Therefore it will take a minimum of 3 years to get all of your money back. If you set up auto lending (where money that is paid back is automatically loaned out again) you won't get anything back until you turn it off again! Zopa is not a savings account. Your money is physically lent out to the borrower. They might not pay it back. Zopa employ a debt collection agency on your behalf but even so, it is theoretically possible for someone to take out a loan & not pay a penny back & you will lose the lot (& pay tax on your loss). Zopa's historical default rate is very low, the risk is spread very well & the bad debt rates are clearly shown & factored in for you when you set your rates. A lender needs to bear in mind though that collectively Zopa administers millions of pounds worth of loans to many thousands of people. If one borrower defaults then the effect on Zopa's overall default rate will be a fraction of a percent. But if you only lend £10, your personal bad debt rate could potentially be 100%. Statistically the more loans you make the more insignificant bad debt will become, so those who can only afford to put in a little bit of money are risking more than those who can offer a lot of money. I consider lending money to be like investing. I consider investing to be a fancy name for gambling. Don't lend/invest/bet money that you can't afford to lose. Make sure you factor in the 1% lending fee. If you set your loan rate to 8% you'll get a return of 7% (assuming no one defaults). You will have to pay tax on the interest by completing a tax return. Your money is NOT covered by the Financial Services Compensation Scheme (where savings are covered by the UK government up to £50,000 per person per institution). Again, your money is not held in an account, it is physically lent out to the borrower. If you are considering lending money, Zopa is not for you if:

• You can't afford to lose your money
• You can't wait a minimum of 3 years to get your money back
• You don't understand what AER means
• You don't know how to complete a tax return

I've not borrowed any money from Zopa so I can't comment on the borrowing process. So that's all the bad stuff out the way... The good stuff You can make a lot of money. This is obviously the main reason why anyone lends money & the major selling point of Zopa. Originally I put in £200 & I made more in 3 months than my savings account which had over £10,000 made in the same period. In total I have lent out £800 which would see a return of approx £50 each year (if I had chosen to keep lending it out). It's fun. There is something very satisfying watching the money roll in (although you do have to be patient). It's personal. It is satisfying to bypass the banks & take the money for yourself & help a real person at the same time. It's really easy. Zopa does all the hard work for you & presents everything very clearly. So why am I stopping? In three years time I think I might actually be in a position to buy a house! I will then be needing every penny I've got directly in my hands. On a lesser note I have found Zopa to be too addictive, I log on most days to check statements even though the process is totally automated & there is nothing I can do because all my money has been loaned out. I now want to get all of my money back into my savings account so I can close my Zopa account & not spend so much time looking at all the numbers. If you want to have a go, please consider signing up using my Affiliate link, if you do I will get a little bit of money if you take out a loan or lend out £2000 or more. If you don't, here's a clean link.