Our research has found that almost half of people (43%) who got a credit card did so to earn rewards.
An estimated five million used their points to get free flights and other holiday perks, 1.6 million enjoyed an entirely free holiday. But many used points to get free supermarket groceries, Christmas gifts and many other retail perks.
But this comes as credit card providers reduce their reward schemes – apparently due to new rules pushing up their costs.
Capital One was the first casualty, pulling its rewards scheme today, and RBS plans to cut their rewards scheme later in the year.
Something for nothing?
David Mann, Head of Money at uSwitch, says:
“Getting something for nothing seems like a dream, but enjoying free flights or holidays just for putting the weekly shop on your credit card is a reality for many savvy spenders.
“Reward cards are hugely popular, and it’s clear to see why. As long as you pay off your balance in full every month, using your credit card for everyday expenses – as well as big one-off purchases – can give you a real boost.
“But with so many different schemes to choose from – from supermarket loyalty points, to airmiles or cold hard cash – it’s important to think about how much you’ll spend, and where.
“However, with Capital One pulling their scheme in June, and RBS planning a similar move, these deals may not be around for ever.”
There are still many credit cards offering reward perks left, we explain some of your options below, but it’s well worth comparing the entire reward card market.
Our research found 58% of people thought supermarket loyalty rewards offer the best value for money.
Supermarket reward points can give substantial discounts on your spending or can be redeemed for day trips, holidays perks, free meals and other perks.
There are many supermarket cards to choose from and you should consider where you shop regularly, but we take a look at two of the best below.
- 1000 Clubcard points if you make a purchase or transfer a balance within 2 months of account opening
- 1 Clubcard point for every £4 spent in each purchase transaction
- 17 months 0% on purchases and 3 months 0% on balance transfers (2.9% fee)
Fees and charges: No annual fee, rep. APR 18.9%
- Double Freedom points on UK supermarket, petrol station and all Transport for London
- 0% interest on balance transfers for the first 18 months (2% fee applies)
- 0% interest on purchases for 6 months from account opening
Fees and charges: No annual fee, rep. APR 21.9%
56% feel cashback cards give the best value for money – a sign that boosting bank balances is still a priority for many. So what are the best cards to get cash back for your spend?
- 5% cashback in your first 3 months (up to £100)
- Up to 1.25% cashback thereafter
Fees and charges: No annual fee, rep. APR 19.9%
- First year fee-free if you have or open a 123 Current Account. Otherwise £24 annual fee 23 months
- 1% cashback on supermarket purchases; 2% from department stores; 3% on petrol, national rail and TFL purchases*
- 0% on purchases and balance transfers; 23 months 0% transfer fee (3% thereafter)
Fees and charges: £24 annual fee, rep. APR 21.9%
38% of those we spoke to feel airline reward cards offer value for money. Avios points and Virgin Miles can put you on the other side of the world with free flights and upgrades.
But airline reward deals still need to have their taxes paid, so these cards aren’t for everyone. But if you do travel regularly what’s a good airline reward card to get?
- 9000 Avios when spending £1000 within the first 3 months
- Companion Voucher when you spend £10000 in one year
- 1 Avios for every £1 spent
Fees and charges: No annual fee, rep. APR 15.9%