Best 10 Credit Card Rewards
From travel insurance to shopping vouchers, there are many benefits of owning a rewards credit card.
So what is a rewards credit card, and how do you know which credit card is appropriate for you?
We explore the best 10 credit card rewards.
Rewarded for spending on a credit card? It might sound too good to be true.
However, this is what a rewards credit card offers.
Several credit cards provide different benefits for the end-user. For example, cashback.
Your credit card could offer pure cashback when you spend over a certain amount; therefore, you can theoretically earn money back for using the card.
Another benefit is vouchers or points. Some rewards credit cards can switch points you have accrued into shopping vouchers.
If you set up a direct debit that pays the card off monthly and is debt-free, these rewards will be available to you. You must, therefore, keep up to date with your payments to benefit.
Essentially, the more you use your cashback credit card or rewards card, the more you will be rewarded.
You can even receive several freebies worth hundreds each year.
Some credit cards might even offer interest-free terms when you sign up. The amount of time this applies will depend on the vendor; however, It is worth investigating this benefit as it is a great money-saving perk.
Some cards also offer air miles which can suit many a frequent flyer, especially if you are traveling as part of your work.
Each reward credit card has its list of benefits; therefore, it is best to do your homework before you pick one.
This is for two reasons:
- To ensure the credit card has the rewards you require
- To be granted access to a credit card by the card vendor, you need to meet all the requirements
Some cards have high-interest rates and annual fees, however, so ensure you investigate this before selecting your card.
As mentioned above, there are many rewards available to you, depending on which card you choose.
Here we drill down into some of the benefits you can receive:
Cashback – You can get cashback from the money you spend. For example, if a card paid 4% cashback on all purchases and you purchased a new phone for £600, you would earn £24 cashback. Cashback is usually paid out annually on the month you initially signed up for the card. If you have spent significantly in that year, your cashback reward can be quite high.
Amazon Platinum – If you want a point and a half for every £2 spent on Amazon and a single point for every £2 spent on the card elsewhere, then the Amazon Platinum is a good offer. Perfect for frequent Amazon shoppers, it pays a rate of 0.75% for spending on the site and 0.5% back when using your card at other outlets.
Bonus points – Some credit cards offer bonus points as an introductory offer; therefore, you could potentially earn double points on some purchases at the beginning of your card holding. Bonus points can also be offered throughout the year as special offers – the more you spend, the more bonus points are earned.
Hotel schemes – Hotel credit cards or ‘unbranded’ credit cards allow you to convert points to several hotel brands. If you have accrued enough points, you could get a substantial amount of money off at designated hotels. For example, The Hilton, or even Best Western and Marriot.
Air miles – Some credit cards or Avios cards specialize in providing points for air miles as a reward for spending with the card. Therefore, the card will translate your rewards into miles that you can use for traveling instead of cashback or any other points-based scheme.
Supermarket points and voucher schemes – You might have a loyalty card with your favorite supermarket that you shop with regularly. You are rewarded for your loyalty by turning your pounds into points and building up vouchers to pay for a shop without additional payment.
How reward cards work depends on the card you have opted for and the benefits it offers.
Usually, when you spend money on your credit card, you will receive points or cashback that you can switch to vouchers or discounts at certain stores.
A reward card is a good way to earn and save. However, although the rewards are endearing and receiving rewards for spending is appealing, you need to make sure you read the small print.
For example, if you do not pay the card off in full each month, some vendors will charge interest; therefore, you will receive nothing in return except having spent more than planned.
There also might be a minimum spend with some cards to get points.
For example, you might need to spend over £50 or sometimes more to receive your first batch of points. This will depend on the card and the vendor.
Use the card for your usual spending to get the maximum rewards within your budget – You need to use your card regularly to accrue enough points worthy of exchange, so use it like you would use your debit card, but make sure you already have the money to pay it off in full.
Paying the full amount back each month – Most companies require the full amount of the card paid each month. Setting up a direct debit will avoid missing a payment and receiving unwanted interest charges that will cancel out any of the benefits.
Do not withdraw any cash from the credit card due to interest charges – Keep your credit card for the use you took it out. You will not receive any rewards on cash withdrawals or loans.
Read the terms and conditions thoroughly when you are researching credit cards – You do not want a card with high-interest charges, or a minimum spend for receiving rewards.
While there is no exact 'best' rewards card, there might be a ‘best for you’ rewards card.
Here are a few things to look out for when making your decision:
- Compare the credit cards to see which one offers what
- Determine what rewards you would like to receive
- Work out how much you are thinking of spending on your card per year
- Will you be accepted for the card? Do you fit the criteria?
Good for: Vouchers
Maximum APR: 19.9%
M&S Bank cardholders can get bonus cash back and points, which can be converted into vouchers for the brand.
Advantages: The M&S credit card usually offers an introductory offer.
For example, if you sign up, you could receive £25 worth of cashback immediately.
They will also give you points if you opt-out of paperless statements.
There is no minimum spend when it comes to points. It is interest-free too.
Disadvantages: If you have picked this card for the 0% interest, we would always recommend paying the minimum monthly payment.
Ensure you clear the debt before the 0% ends as it will continue at 19.9% representative APR.
Good for: Amazon shoppers
Maximum APR: 21.9%
Advantages: When you open an Amazon account, you are offered an instant spend of up to £500 before being given the card.
If you pay the balance off in full each month, it will be interest-free on purchases for 56 days.
This credit card is also open to those with lower credit ratings.
Disadvantages: The APR is 21.9%, and there is a high balance transfer fee compared to other credit card companies.
You will also have to pay a fee if you use your card abroad.
Good for: Regular use and points
Maximum APR: 20.9%
Advantages: You could potentially save at least 10% on two big shops a month when you sign up for Tesco Clubcard, and receive money off selected brands within Tesco too.
You can collect points doing your weekly shop, allowing you to accrue money off food, fuel and fashion, etc.
It is 20.9% APR; however, this can differ due to introductory offers and your circumstances.
Disadvantages: Depending on your credit score or if you have any prior financial difficulties, Tesco might cut your 0% interest reward and charge you a higher APR in exchange for accepting the application.
Good for: Points for repurchases
Maximum APR: 18.9%
Advantages: JLP credit card offers its users many different rewards.
The Partnership card, as it is known, provides interest-free credit for nine months and allows you to earn points for a repurchase.
Disadvantages: If you are unable clear the balance each month, you could incur high-interest charges once the introductory offer ends.
There have also been known technical issues with the card in the past.
Good for: No annual fee
Maximum APR: 20.9% APR (variable)
Advantages: Sainsbury’s allows you to spend £400 or more at Sainsbury's, Argos and their Tu Clothing range within the first two months in exchange for 10,000 bonus Nectar points, worth £50.
You can also exchange your Nectar points for Avios to put towards flights.
Disadvantages: You will only be able to apply for this credit card if you have had a Sainsbury’s Nectar card for six months.
Good for: Foreign travel
Maximum APR: 9.9%
Advantages: You can expect no-fee foreign transactions and currencies converted to standard Mastercard rates with the NatWest credit card.
It also has low ongoing rates, rather than 0% interest during an introductory period.
You do not have to worry about switching cards over once the introductory period ends.
There are also no balance transfer fees.
Disadvantages: Although this card has some rewards, there are other cards with more enticing rewards and introductory offers.
It is only available to existing customers.
Good for: Flying
Maximum APR: 22.9%
Advantages: If you are a frequent flyer, a key advantage of the Virgin Atlantic Reward credit card is that points turn into air miles.
You can also earn cashback on your credit card spend at participating retailers, as well as low balance transfer fees.
Disadvantages: There is an annual credit card fee to use the Virgin Atlantic credit card.
This can depend on your circumstances and credit score.
Best for: Rewards
Maximum APR: 56.6% APR incl fee
Advantages: You will receive a bonus of 20,000 reward points if £3,000 is spent within the first three months.
You will also receive £100 Amazon or M&S voucher, not to mention two airport lounge visits per year, amongst other rewards.
Disadvantages: The annual rate for this card is high at £140 free in the first year.
If you have held an Amex card in the past two years, you will not benefit from the intro offers.
Good for: Hotels
Maximum APR: 16.99% APR (variable)
Advantages: If you are looking for a hotel rewards card, the IHG Rewards Club is an excellent choice.
You will be given a 60,000 point welcome bonus when you join, and you will get 10% back for any additional redemptions.
As an anniversary gift, you will also be gifted a free night at a hotel.
Disadvantages: Although this credit card comes with a multitude of great rewards, it can change from time to time.
Depending on when you take the card out, you might miss the benefits you are after.
It also has a 16.99% APR which is variable and can increase depending on your credit or if you miss a payment.
10. Amex Platinum
Good for: Cashback
Maximum APR: 15.99% to 22.99% (variable)
Advantages: The Amex Platinum credit card is one of the top credit cards that does not have an annual fee.
It is excellent if you want to use it for big-ticket items as it gives you 5% back when you spend £2,000 in the first three months.
You will then receive 1% thereafter.
Disadvantages: Cashback is paid into your account annually rather than monthly, and you need to spend at least £3,000 per year to receive any cashback.
If you have held any Amex card in the past two years, you will not receive the 5% cashback rate in the first three months.
All credit cards provide benefits and rewards in some capacity, so you need to do your research to determine which vendor offers the best deal and rewards for you.
Always remember to read the small print and keep a note of when introductory offers end.
WikiJob does not provide tax, investment or financial services and advice. The information provided is for general reference and you should not rely on it to make (or refrain from making) any financial decisions. Personal situations will vary. Always seek independent financial advice when choosing how to manage your finances.