What is a rewards credit card?
A rewards credit card allows you to earn points or other rewards on your everyday spending on the card. They tend to be linked to a particular retailer or activity, for example supermarket credit cards or air miles credit cards. You will generally earn a higher rate of points or money off when you shop with that retailer or brand, while also earning on your other spending elsewhere. Most commonly, the points will convert into vouchers that can be used in store or online.
In this article, we set out our recommendations for the best rewards credit cards currently available. This analysis is based on the rewards deal the card offers, whether it attracts an annual fee, the APR and any other perks.
Which are the best rewards credit cards? December 2022
|Card name||APR||Annual fee||Rewards rate||What is reward worth?|
|70.1%||£160 (£0 in first year)||1 point for every £1 spent, 2 points for airline and foreign currency purchases, 3 points for American Express travel||1 point = 0.5p for shopping vouchers
1 point = 1 Avios
Air miles/hotel point values vary
|21.9%||£0||Up to 3 points for every £1 spent in M&S in the first year, 1 point in subsequent years
1 point for every £5 spent elsewhere
|100 points = £1 M&S voucher|
|23.9%||£0||1 point for every £5 spent on your card||100 points = £1|
List of the best UK rewards credit cards
- Reward offer: Earn 30,000 Membership Rewards point when you spend £3,000 in the first 3 months (until 8th November)
- Earn rate: 1 point for every £1 you spend and 2 points for airline or foreign currency purchase
- Representative APR: 70.1% variable
- Annual fee: £160 (£0 in the first year)
- Why we like it: Although it has a high APR and annual fee, this American Express card offers a great deal of flexibility as you can use the points with numerous air miles loyalty schemes, as well as with a wide range of retailers.
- Reward offer: Up to 3 points for every £1 spent in M&S
- Earn rate: 1 point for every £1 after the first year, 1 point for every £5 spent elsewhere
- Representative APR: 21.9% variable
- Annual fee: £0
- Why we like it: If you're a regular shopper at M&S, you will enjoy the vouchers you will be rewarded with, particularly during the first year of card membership, when all points are doubled. You can also get 0% interest-free on purchases and balance transfers for 12 months
- Reward offer: 2,500 welcome points worth £25 when you make your first transaction, extra 2,500 bonus points if you spend £10,000 or more in a year
- Earn rate: Up to 10 points for every £1 spent with selected retailers and 1 point for every £5 spent elsewhere. 100 points is worth £1
- Representative APR: 23.9% variable
- Annual fee: £0
- Why we like it: You can use the points instantly against purchases you make on the card, using the Pay with Rewards app
How to make the most of your rewards credit card
As well as following usual good practice with your credit card, which includes paying the balance off in full each month so you don't have to pay interest and not exceeding your credit limit, with a rewards credit card you should also consider:
Using it for all your day-to-day spending
To maximise the amount of points or other rewards you'll get, it makes sense to use your rewards credit card for all of your everyday spending, including grocery shopping, petrol and bigger ticket items. This is in addition to the specific spending you do with the retailer or brand the rewards card is linked to. However, make sure you aren't tempted to overspend on the card and to buy things simply to earn extra rewards points.
Check when the points expire
Unlike cashback, which is offset against the balance on your credit card, with rewards there is often an expiry date. This means you may have a limited time to use them before they lose their value. Make sure you keep a note of when individual rewards go out of date to avoid them going to waste.
Look to earn bonus points
Rewards credit cards will often have set dates where they'll offer bonus points, which often coincides with bank holiday weekends or the start of a sale. By saving any shopping you have planned to those dates, you can increase the overall rewards you will receive.
Advantages of a rewards credit card
- As long as you pay the balance in full each month and don't overspend on the card, you can earn rewards on the normal spending you would be doing anyway
- You can choose a card that ties in with your particular interests or spending habits. For example, if you're a frequent traveller, you may opt for a card that rewards you with air miles.
- As with all credit cards, using a rewards credit card will provide you with section 75 protection under the Consumer Credit Act
Disadvantages of a rewards credit card
- With some rewards schemes, there are periods when you may not be able to use the points you have earned. For example, you may not be able to redeem vouchers at peak times or book flights with air mile rewards during the summer holidays.
- Unlike cashback credit cards, which simply give you a percentage of your spending back, reward cards tend to give you vouchers or discounts with set retailers or against certain activities, such as travel. This gives you less flexibility over how you can make use of your rewards, particularly if your circumstances change.
- Rewards cards can encourage card holders to spend over and above what they normally would, especially if there is a certain level of spending required to unlock bonus points. To counteract this, you need to keep a firm grip on your use of the card, using, for example, the mobile app linked to the card to monitor your spending.
- Rewards cards can attract a higher APR than alternative credit cards, which means you will pay more overall if you don't pay off the balance each month.
Alternatives to rewards credit cards
A cashback credit card is a good option if you don't want to be tied to a particular type of reward and prefer to have greater flexibility. There aren't as many attractive cashback credit card deals as there once were, so make sure you read our best-buy cashback credit card review to help you find a good option for you.
In addition to rewards and cashback credit cards, don't forget you can also benefit from earning points and rewards through store loyalty schemes, such as a Nectar card or Tesco Clubcard . While the rate of rewards won't be as high as with a credit card, these schemes are free to join and won't impact upon your credit score.
Is a rewards credit card right for you?
A rewards credit card might suit you if you are looking to get a bonus from the spending you would be doing anyway and are confident you won't overspend on the card and get into unnecessary debt. The best cards tend to require a good credit score, so you may not be eligible if you have missed payments or suffered more serious financial mismanagement in the past. To check whether you are likely to be accepted, without it appearing on your credit file, consider using an online eligibility checker. There is a comprehensive list of card providers, with links to their eligibility checkers in our article "How to choose the best credit card for you".