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. If you are looking to earn airmiles through your rewards credit card, check out our 'Which are the best air miles credit cards – and should I get one?' page.
Which are the best rewards credit cards? September 2023
|Card name||APR||Annual fee||Rewards rate|
|75.2%||£160 (£0 in first year)||1 point for every £1 spent, 2 points for purchases directly with an airline, 3 points for American Express Travel purchases
New card members can earn 20,000 points if they spend £3,000 in 3 months
|27.9%||£0||5 points for every £4 spent at John Lewis and Waitrose and 1 point for every £4 spent elsewhere
New cardholders get triple points (15 points for every £4 spent) on John Lewis and Waitrose spending for the first 90 days
|23.9%||£0||10 points for every £1 spent on your card at select retailers and 1 point for every £5 spent elsewhere
New cardholders get 2,500 welcome points (worth £25) after making the first card transaction
Earn an additional 2,500 bonus points if you spend over £10,000 in the first year (can be earned every year for the first 5 years as long as spend £10,000 minimum)
|American Express Rewards||30.7%||£0||1 point for every £1 spent
10,000 bonus Amex points (minimum £2,000 spend in first 3 months)
|American Express Nectar||36.3%||£25 (no fee in the first year)||3 points per £1 spent at Nectar partners (including Sainsbury's)
2 points per £1 spent elsewhere
List of the best UK rewards credit cards
- Reward offer: Earn 20,000 Amex Membership Rewards points when you spend £3,000 in the first 3 months
- Rewards rate: 1 point for every £1 spent, 2 points per £1 for purchases made directly with an airline, 3 points per £1 for spending with American Express Travel
- Representative APR: 75.2% 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: Triple points on spending at John Lewis and Waitrose for the first 90 days
- Rewards rate: 5 points (15 in the first 90 days) for every £4 spent at John Lewis and Waitrose and 1 point for every £4 spent elsewhere
- Representative APR: 27.9% variable
- Annual fee: £0
- Why we like it: If you regularly shop for groceries at Waitrose, it's a great way to earn extra points
- 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
- Rewards rate: Up to 10 points for every £1 spent with selected retailers and 1 point for every £5 spent elsewhere
- 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
- Reward offer: 10,000 bonus Amex points if you spend at least £2,000 spend in first 3 months
- Rewards rate: 1 Amex point per £1 spent
- Representative APR: 30.7%
- Annual fee: £0
- Why we like it: Flexibility on how you use your points, including transferring them to airline loyalty schemes, redeeming with Amazon and more
- Reward offer: 20,000 bonus Nectar points when you spend £2,000 in the first three months
- Rewards rate: Earn 2 Nectar points for every £1 spent on the card or 3 points for every £1 spent with Nectar partners, such as Sainsbury's
- Representative APR: 36.3%
- Annual fee: £25 (no fee for the first year)
- Why we like it: Great way to earn extra Nectar points, especially if you regularly shop at Sainsbury's
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 exceed your credit limit, with a rewards credit card you should also consider:
Using it for your day-to-day spending
To maximise the number 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.
Pros and cons of a rewards credit card
Pros 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.
Cons 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 cardholders 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. You can compare some of the best loyalty cards in our article, 'What is the best supermarket loyalty card?'
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'.