If you’re looking to give your personal finances a little boost, taking out a reward credit card can go a long way. We list some of the best options below, and explain how to use your card effectively.
If used effectively, a rewards credit card can provide you with a nice perk.
From cashback to air miles, there are many ways providers choose to reward their members.
However, don’t get caught up with bright colours and clever marketing. Some cards promise enticing rewards, but ultimately you’ll need to fulfil strict eligibility criteria to gain your card’s perk.
That’s why we’ve listed the best rewards credit cards below and we explain:
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What are reward credit cards?
A reward credit card incentives you to spend with it by attaching a rewards scheme. This can come in the form of cashback on your everyday purchases to points which can later be redeemed at supermarkets or airlines.
Below we explain the different types of rewards credit cards in more detail.
If used carefully, reward cards can be a great way to earn bonuses, but you’ll need to be careful.
Don’t use these cards as an excuse to overspend because anything you can’t pay off in full every month will incur an interest charge. Compared to other credit cards, rewards credit cards can offer some of the most expensive interest rates around and you can soon find yourself racking up debt which costs more than the rewards.
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Earn more with American Express® Preferred Rewards Gold Credit Card
New Cardmembers earn 20,000 Membership Rewards® points when you spend £3,000 in your first three months of Cardmembership.
Terms Apply. 18+, subject to status. 88.8% APR variable
What are the different types of rewards credit cards?
To get an idea of what type of rewards you can earn, we’ve listed the best rewards credit cards below:
Cashback cards
Cashback cards pay money back into your account for each eligible transaction you make. You’ll often see cashback advertised as a percentage of your spend.
For example, if you card promises 1% cashback when you go grocery shopping, and you know your bill roughly comes to £100 a week, you then know you’ll earn about £1 every week.
When signing up to a cashback credit card, keep an eye out for limits. Some offers cap the amount of cashback you can earn.
Our guide lists the best cashback cards on the market.
Air mile credit cards
Air mile credit cards offer you air miles for each eligible purchase made with your card. These cards are linked to schemes such as the British Airways Executive Club, which gifts Avios points.
Credit cards for other perks
Similarly, other cards offer rewards on a points-based system which can be redeemed at other retailers.
This includes popular supermarkets, with some options from Tesco Bank and Sainsbury’s Bank offering Clubcard and Nectar points respectively.
Rewards cards not for you?
That’s okay, these cards aren’t meant to be for everyone. Plus, it’s best you look at all your options first before deciding to apply with one lender.
A great way to start your research is to use our free eligibility checker, which is powered by Creditec. Using whole of market data, it takes your basic information and credit history to find the best cards available for you.
What is the best way to use a reward card?
A reward card can be used for all normal spending to ensure you’re making the most of the bonuses on offer. You then need to pay the balance in full each month to avoid any interest charges.
A great tip for managing your reward card is to set up a direct debit so you have the automatic discipline of repaying the amount spent in full each month.
It is also important not to borrow or withdraw cash on credit cards as there are likely to be high fees, with interest that is usually charged straight away.
In addition, some of the cards below are free for a year before a hefty annual fee kicks in. So it’s worth planning ahead and cancelling it if you don’t think the fee is worth it
If you are taking out an American Express card, be aware that they are not accepted at all businesses and online retailers. One way around this is to add a credit card to a PayPal account and pay with that, but you would lose your Section 75 protection rights. However, PayPal does have its own buyer protection in place.
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What is the best credit card for rewards?
Below we’ve listed some of the best reward credit cards on the market. Remember, if it comes with an annual fee consider if it costs more than the rewards.
Read more: Which American Express card is right for you?
For every pound you spend, Virgin Atlantic will reward you with 0.75 Virgin points. These can later be redeemed for upgrades on flights, take out one of their holiday packages, or spend it at duty free.
To get an understanding of what your points earn, 4,500 gets three cinema tickets and 42,000 gets you a return flight to New York.
Representative Example: 26.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 26.9% p.a. (variable).
Upon sign up, you’ll earn 5,000 Avios points if you spend £1,000 in the first three months of card membership. After this you’ll earn one Avios point for every pound spent – which is only a third of what the American Express’s British Airways card is offering.
Representative Example: 29.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 29.9% p.a. (variable).
When you sign up, you’ll receive 5,000 Avios points after spending at least £2,000 in the first three months of card membership. More information on Avios points can be found in our guide.
In addition to this, if you spend £10,000 on your card over the year you’ll earn a companion voucher in any cabin. This means if you book a first class trip to New York you’ll receive a second ticket for your partner or friend to join you. If you’re travelling by yourself, you can knock 50% off the Avios price paid for your flight.
Other perks include earning three Avios points for every pound spent through British Airways, one and a half Avios points on all other purchases, and 9,000 Avios points for inviting a friend to join the programme.
Representative Example: 31% APR variable. Based on assumed borrowing of £1,200. Rate of interest 31% p.a. (variable).
Once you earn 100 reward points you’ll receive a £1 M&S voucher, so compared to other rewards programmes it’s not the most generous.
Representative Example: Representative 24.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 24.9% p.a. (variable).
One thing to note is that most of the places where you can redeem your points are in London, meaning people living in the capital will likely get the best value from this card. If you do live in other areas of the country there are options to use your points. Monthly changing partners include food and drink platform Delli, flower delivery Bloom&Wild, and car hire Turo among others.
If you’re a frequent traveller, your Yonder points can also be redeemed for flights at any airline.
Representative Example: 32.9% APR variable. Based on assumed borrowing of £1,200. Rate of interest 32.9% p.a. (variable).
The best reward debit cards for cashback
Debit cards that reward you with cashback are not as common or as generous as they used to be. But these two banks could be a decent option:
It’s not a credit card, so you will need to apply for it like any other bank account, but you also won’t face a hard credit check when you do. Instead, Chase carries out a soft credit check, which isn’t shown to lenders and therefore won’t affect your ability to get credit in the future.
While there’s no fancy introductory bonus like those offered by American Express, Chase pays the highest ongoing rate of cashback of any fee-free card, even though it’s only for a year. This makes it a great, no-frills option to do the bulk of your spending with.
The current account also comes with an easy-access savings account paying 3.85% AER (variable) monthly, another nice bonus.
– 1% cashback on water and energy bills, council tax, mobile phone bills, broadband/tv packages (up to £10/month)
– 1% cashback on supermarket and travel spending (up to £10/month)
– Optional savings account with 7.00% AER* / 6.78% gross (variable) interest on balances up to £4,000. It’s important to note that this rate includes a 2.50% AER / 2.47% gross (variable) bonus rate for the first 12 months from opening
– No Santander fees for using your Santander Edge debit card to withdraw cash and make payments outside the UK in the local currency
– Receive access to Santander Boosts, where you’ll get cashback, vouchers, prize draw entries and personalised offers from selected partners
You will need to pay in £500 and maintain two direct debits each month, be 18 or over and live in the UK permanently to qualify for these benefits. If you have a Santander mortgage or expensive bills, a Santander Edge Up is likely to be more lucrative as you’d earn more cashback.
– Overdraft interest rate (APR): 39.94%
– Maximum cash withdrawal per day: £300
Overdraft subject to eligibility
Can I get a rewards credit card with bad credit?
While it is still possible to get a rewards credit card with bad credit, your options will likely be limited. It all depends on your credit score, with providers often reserving their best offers for their best applicants.
So, before you apply for your card make sure you’re eligible first. A great place to start is by using our online eligibility checker for free.
It only performs a soft search on your credit history, which is invisible to lenders and won’t impact your score. After filling in your details you’ll get a personalised list of cards you’ll be eligible for.
Read more: The best credit cards for bad credit
Important information
Some of the products promoted are from our affiliate partners from whom we receive compensation. While we aim to feature some of the best products available, we cannot review every product on the market.
