What is a rewards credit card?

It is a credit card that lets you earn rewards for spending on it.

For example, you could earn points for each pound you spend on your reward credit card, that can later be exchanged for shopping vouchers.

The points you get depends on the card, with some offering a pound for each pound you spend, but other offering a point for every 5 spend.

What rewards you can get

  • Cashback schemes let you earn money for spending, e.g. 0.5% of any card transaction. Here is how cashback cards work and how to use them.

  • Supermarket rewards schemes like Tesco's Clubcard or Sainsbury's Nectar points can be exchanged for vouchers to spend in-store, or with some other retailers.

  • Air miles schemes like Avios and Virgin Atlantic's Flying Club give you points you can exchange for flights.

  • Department store schemes let you exchange your points for vouchers you can spend in shops like John Lewis and Marks and Spencer.

  • Football club schemes offer free team merchandise, like a shirt, if you spend a certain amount within the first few months of using the card.

  • Hotel reward schemes like IHG Rewards Club give you points you can use to book hotel rooms or flights.

There are also provider specific schemes, like Lloyds' Choice, HSBC's Premier Rewards and Barclaycard Freedom Rewards. These let you choose between a range of rewards like shopping vouchers, flights or restaurant vouchers.

When do you get the rewards?

Each scheme is different, but most only give their rewards once you have reached a certain number of points.

Get your reward immediately: Some schemes such as Sainsbury's Nectar points take up to 48 hours to be added to your account. Once you have 500 or more (worth 2.50), you can spend them in store or online whenever you like.

Get your reward every few months: Rewards like Tesco Clubcard vouchers are issued every three months as long as you have earned enough points.

Get your reward once a year: Some schemes will exchange your points for rewards once a year. For example, if you had 1,030 points after a year and got a shopping voucher worth 0.50 for every 50 points, you would get a voucher for 10. The extra 30 points would be carried over into the next year's balance.

How to earn more points

Many cards offer the chance to earn bonus points, especially in the first few months you have the card.

For example, a card might offer you an extra 10,000 points if you spend more than 3,000 in the first three months.

Others might usually give you a point for every pound you spend on the card but offer two points per pound spent during the first three months.

You may also get more points when you spend with certain retailers. For example, the Nectar card offers you two points for every 1 you spend in Sainsbury's but one point for every 5 you spend elsewhere.

How much does a rewards credit card cost?

If you are unable to pay off everything you spend, the interest and other fees you are charged could come to more than the value of the rewards you earn.

These cards often come with high interest rates and some have an annual fee. You could also have to pay other credit card charges if you:

  • Withdraw cash

  • Miss a monthly repayment

  • Break the terms and conditions

Should you get a rewards credit card?

If you can pay off your statement balance in full every month, you should be able to benefit from having a rewards card.

Set up a direct debit for the full amount to make sure you do not miss any repayments.

If you want to use a card to borrow, choose one with a low interest rate or an interest free period on what you buy.

How to choose one

You can compare rewards credit cards here. When you choose your card, look beyond how many points you earn for each pound you spend. Instead, think about:

  1. How much you are likely to spend on the card? You can then work out what rewards you would earn.

  2. Decide what type of rewards you would actually use. For example, if you prefer shopping to travelling, a scheme that offers high street vouchers will suit you better than one that gives you air miles.

Rewards cards: additional questions


Are reward points transferable?


No, you cannot swap points between schemes, but some points can be swapped for vouchers from different retailers.


How many points can you earn?


Check with each provider, as some schemes limit the points you can earn each year.


Can you check how many points you have?


Most schemes let you check your points balance online.