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Get a little extra back when you shop with a rewards card

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Last updated
November 21, 2023

What is a rewards credit card?

With a rewards credit card every £1 you spend on the card earns you points that you can later redeem for a range of rewards such as free flights, airport lounge access, supermarket points, shopping vouchers and even cash paid back to you.

They can do this because of the way credit cards work.

Every time you buy something with a card, the network provider - Mastercard, Visa or American Express - gets a small fee for sorting out the payment.

With rewards cards, the provider splits that with you - using its buying power to get deals with major firms like Sainsbury’s and British Airways.

The best reward credit cards might require you to spend a minimum amount on your card each year to qualify for the perks. They might also charge an annual fee. So it’s best to work out if you’ll be spending enough to qualify for the rewards, and whether you’re gaining enough to justify the annual fee.

If you’re spending enough and are able to pay off your balance in full each month, reward credit cards can be a great way to access a range of benefits without paying any interest.

However, if you’re someone with existing credit card debt or you’re not confident you’ll be able to pay off what you’ve borrowed in full each month, these might not be the right cards for you.

Reward cards can offer a little extra back as a perk for spending on them - just make sure you clear the balance each month.”

What rewards are on offer?

Avios, airmiles and other travel perks

Avios, airmiles and other travel perks

One of the most common types of reward credit card is one designed for travel. These let you build up virtual air miles that you can then exchange for free flights (you usually still pay taxes and charges) or upgrades on plane tickets. Other common travel perks include free airport lounge access and discounts from travel firms.

Supermarket points

Supermarket points

Sainsbury's, Tesco, M&S and John Lewis all offer customers extra rewards for spending on their linked credit cards. With Tesco and Sainsbury’s, for instance, you can pick up Clubcard or Nectar points when spending outside the supermarket and even more points than usual if you shop at their stores or on their website or app.

Cashback

Cashback

As well as loyalty points and air miles, some credit cards also pay you a percentage of your purchases back as cash. Think of it as a permanent sale where anything you buy with the card has an extra percent or two off. The money is generally returned to you as a credit on your account once a year.

Get a card that offers airmiles

An air miles credit card is designed to reward your spending by giving you airline points. The more you spend on your air miles credit card, the more points you’ll get.

You can then exchange the points for discounts on the price of your flights or upgrades. Depending on which air miles credit card you have, you’ll be able to earn points for flights on different airlines.

Avios points needed for a free flight upgrade[2]
20,000

Our best air miles card

Our editors have picked out our top card for getting airmiles right now.

Editor’s pick
Our chosen Avios credit card

No fee and you get 5,000 Avios if you spend £1,000 in the first three months and an upgrade voucher if you spend £20,000 in the first 12 months.

Author image
Senior Personal Finance Editor
Card
Barclaycard Avios Card
Rewards
Avios
APR
29.9% APR

Representative example: The standard interest rate on purchases is 28.9% p.a. (variable), so if you borrow £1,200 the Representative APR will be 28.9% (variable).

Editor’s pick
Our chosen Avios credit card
Card
Barclaycard Avios Card
Rewards
Avios
APR
29.9% APR

Representative example: The standard interest rate on purchases is 28.9% p.a. (variable), so if you borrow £1,200 the Representative APR will be 28.9% (variable).

No fee and you get 5,000 Avios if you spend £1,000 in the first three months and an upgrade voucher if you spend £20,000 in the first 12 months.

Author image
Senior Personal Finance Editor

We are classed as a credit broker for consumer credit, not a lender.

Supermarket rewards credit cards

Supermarkets are well established in the credit card market and Tesco and Sainsbury’s lead the field.

These cards offer the most points for spending in 'home' shops - so the supermarket itself as well as linked retailers, for example the Sainsbury's card will also boost your points for purchases at Argos.

As well as using these cards for your groceries, you can also use them to collect rewards, in the form of Nectar or Clubcard points, on other purchases you make on the card at other retailers.

They’re not the only supermarkets with credit cards, however, as M&S and John Lewis also offer rewards for spending.

Our best supermarket credit card for rewards

Editor’s pick
Our chosen 0% purchases credit card

This M&S dual credit card offers 18 months of interest free purchases, while balance transfers are interest free for 15 months, but there’s a transfer fee of 2.99%. If you shop at M&S, you could earn points and get M&S vouchers.

Author image
Senior Personal Finance Editor
Card
M&S Bank Shopping Plus Credit Card
Rewards
M&S Points
APR
23.9% APR

Representative example: The standard interest rate on purchases is 23.9% p.a. (variable), so if you borrow £1,200 the Representative APR will be 23.9% (variable).

Editor’s pick
Our chosen 0% purchases credit card
Card
M&S Bank Shopping Plus Credit Card
Rewards
M&S Points
APR
23.9% APR

Representative example: The standard interest rate on purchases is 23.9% p.a. (variable), so if you borrow £1,200 the Representative APR will be 23.9% (variable).

This M&S dual credit card offers 18 months of interest free purchases, while balance transfers are interest free for 15 months, but there’s a transfer fee of 2.99%. If you shop at M&S, you could earn points and get M&S vouchers.

Author image
Senior Personal Finance Editor

We are classed as a credit broker for consumer credit, not a lender.

Cashback rewards credit cards

The most straightforward type of rewards card is a cashback credit card.

Cashback cards give you back a percentage of what you spend, which might be added to your account once a year or more frequently.

American Express (Amex) usually offers the best cashback cards in the market and the best reward credit cards in general, although it’s not accepted in as many places as Visa and Mastercard.

There are things to watch out for though.

Firstly, these cards often come with an introductory bonus, where you earn more cashback in the first few months after you get them.

They also often work on a tiered basis, where how much cashback you get depends on how much you spend on the card.

Finally, watch out for annual fees. You could end up paying a hefty charge on the card which could outweigh any benefit you get from using it. Approach cards charging fees with caution.

Watch out for annual fees on cashback credit cards.”

Our top cashback credit card pick

Editor’s pick
Our chosen cashback credit card

With a strong cashback offering of 5% on purchases in the first 3 months and up to 1% after that, and no card fee, the American Express Platinum Cashback card is our top deal

Author image
Senior Editor, Personal Finance
Card
American Express Platinum Cashback Everyday Card
Rewards
APR
31% APR

Representative example: The standard interest rate on purchases is 31% p.a. (variable), so if you borrow £1,200 the Representative APR will be 31% (variable).

Editor’s pick
Our chosen cashback credit card
Card
American Express Platinum Cashback Everyday Card
Rewards
APR
31% APR

Representative example: The standard interest rate on purchases is 31% p.a. (variable), so if you borrow £1,200 the Representative APR will be 31% (variable).

With a strong cashback offering of 5% on purchases in the first 3 months and up to 1% after that, and no card fee, the American Express Platinum Cashback card is our top deal

Author image
Senior Editor, Personal Finance

We are classed as a credit broker for consumer credit, not a lender.

What is the best way to use a rewards credit card effectively?

The secret to getting the best out of a rewards card is to make sure you know what's on offer.

For example, lots of cards come with introductory bonuses, where the points ramp up if you spend a certain amount, in a certain store, within a certain time.

Miss out on that target and you could see how much you get back seriously affected.

Bonuses aside, many cards pay far more for spending in certain shops - with supermarket cards often increasing rewards for spending in store. If you have the option to pay in more than one way, getting this right can also boost your rewards.

But, more importantly, never spend more than you can afford to repay that month in the hunt for reward points.

Doing that is a losing game, with a few more points here and there almost never making up for missed payments, interest charges and the damage to a credit score that can result from spending more than you can afford to repay.

Set up a direct debit to pay the full card balance off each month on day one of having your card to stay safe.”

What to watch out for

Reward card FAQs

Are rewards cards really worth it?

Rewards credit cards can be worth it, but only if they are used correctly. Perks such as air miles and cashback can help save you money, but it’s crucial to check whether your credit card charges an annual fee and how much interest you could be charged. If you’re confident you’ll spend enough on your credit card to qualify for the rewards (and to make the fee worth it if there is one), and you are able to pay off your balance in full each month, a rewards card can be a great addition to your wallet.

Do reward points expire?

Yes, some types of reward points need to be used within a certain period, so check how long you get and use them before they expire.

Can I get cash rewards?

Yes, cashback credit cards offer money or credits to you statement instead of vouchers.

Can I view my balance and points online?

Yes, most providers let you login to online banking, which lets you check how many reward points you have earned, your balance and your statement.

Can I get bonus points?

Yes, some cards offer bonus points in the first few months if you spend more than a specified amount.

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About the author

James Andrews
James has spent the past 15 years writing and editing personal finance news, specialising in consumer rights, pensions, insurance, property and investments

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