Rewards credit cards

About reward credit cards

With a reward credit card each time you spend, you can earn something back in reward points.

Some of the best credit card rewards allow you to exchange points for store discounts, gift vouchers and even flights.

What is a reward credit card?

A reward credit card gives you points that you can then redeem against goods and services.

The points you earn can be converted into vouchers. Or traded for special offers or days out.

Some reward credit cards offer specific rewards including things like air miles and cashback.

Air miles

An airmiles or airline credit card is a reward credit card for travel. It allows you to collect Avios points through your everyday spending.

You can exchange Avios points for spending towards travel costs including flights, hotels and car rental.

Find out more about air mile credit cards

Cashback

Instead of earning points, a cashback credit card allows you to earn back a percentage of the money you spend. The money you earn will be put back into your account either monthly or annually.

Find out more about cashback credit cards

Should I take out a reward credit card?

This depends on how you use your credit card.

Using a reward credit card instead of cash or your debit card for everyday spending could be a great way to earn something back on unavoidable purchases.

But you should always pay off your balance in full.

Avoid a rewards card if you're unable to pay off your balance

A rewards credit card might not be your best option if you're unable to pay your balance off in full each month.

Credit cards with rewards often have higher interest rates compared to other credit cards. Any rewards you earn might be worth less than the interest you owe.

For example:

You earn 1000 points

You exchange them for a £100 voucher

You've been unable to pay off your balance in full

You now owe £150 in interest charges

You owe more interest than your voucher is worth

The card you choose will depend on your needs and spending habits

Some reward cards give you the chance to collect Nectar points which can be put towards anything from restaurant bills to cinema tickets.

Some cards offer you the chance to earn points that you can spend in a specific shop. Others provide vouchers that you can spend across a variety of retailers.

Multi-purpose reward credit cards

Reward cards are often competitive in other areas, allowing you to use them for different purposes.

Even if you’re not a regular shopper some reward cards could be worth considering for the added benefits on offer.

For example, as well as points, many cards offer long 0% interest periods on balance transfers

Or long 0% interest periods on purchases. Or even both.

But as interest rates on reward credit cards are normally average at best, they’re only really suited to people able to clear their balance in full every month.

What is the best rewards credit card?

There is no such thing as the best reward card. What makes the best reward credit card for you will vary depending on what rewards you'll use most.

If you do most of your shopping with a particular retailer it might be a good idea to get a reward card from that retailer. You can earn points that you'll be able to spend in their shop.

But if you do your shopping all over the place, you might not be getting the best deal. Even with a really attractive rate of points, you'll be tied to shopping in one place when it comes to spending your rewards.

What about premium rewards cards?

Premium cards are elite reward cards that give exclusive rewards like access to VIP lounges, in exchange for a fee.

Find out more about premium cards