Compare Reward Credit Cards

If you are looking for a credit card type that helps your money go further and rewards you for regular purchases, a reward credit card is a great option. Reward credit cards can work in slightly different ways and offer different rewards. We will cover the basics below.

Compare reward credit cards

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Last updated October 2020

What is a reward credit card?

A reward credit card is a card that rewards you with points based on your spending. These points can be redeemed for free gifts, shopping discounts, restaurant vouchers, subscriptions, cashback or air miles. Some reward cards can even collect supermarket loyalty points.

How do credit card rewards work?

Rewards credit cards usually credit your account with a certain number of points per every £1 you spend. These points can then be redeemed for free gifts, experiences or cashback.

As it costs the credit card provider to offer this reward programme, reward cards usually have annual or monthly fees. Some will also charge higher interest rates.

That means you must work out whether having a rewards card is worth the cost. If the rewards card has high-interest rates, then paying it off in full each month will be key to making the card worthwhile.

Advantages of a reward credit card

The advantages of having a reward credit card are perhaps more tangible than any other type of credit card. You will receive rewards directly related to your spending, which can help your money go further. Here are some of the main benefits of a reward credit card:

  • Save money on your food shop - A reward card that gives you vouchers or supermarket loyalty points can help you save money on your regular shop.
  • Save money on travel - One of the popular rewards that these cards offer are travel rewards. These can be redeemed for flights or hotel upgrades. Some of these cards will even include travel insurance as one of the perks.
  • An incentive to use the credit card - If you are in the habit of forgetting to use a credit card, a reward card can incentivise you to spend more. This can help you build a good credit rating faster - that is, providing you pay the bill in full.

Disadvantages of a reward credit card

Briefly mentioned above, the main downside of a reward credit card is that it usually costs money, whereas other regular credit cards are free.

  • High-interest rates - Reward cards will typically charge highest interest rates which can end up being a large expense for having the card. To avoid this, you will need to pay in full each month.
  • Annual fees - Most reward credit cards will charge an annual fee which can cost upwards of £100 in some cases. This may be worth it if you regularly use the card and collect rewards. If you only use it occasionally, it may be an unnecessary expense.
  • Overspending - Reward cards give you a nice incentive to spend more which isn’t necessarily bad if you can make repayments. However, the downside to this is that you could end up in unmanageable debt. If you have issues with overspending or impulsive spending, a reward credit card might be a bad idea.

Reward credit card FAQs

We have listed out some frequently asked reward card questions.

If you know you will get a lot of use out of a reward credit card and are confident you can make repayments, it could definitely be worth it. If you know you will be unable to pay off your balance each month, it’s best to avoid a reward credit card. That’s because the rewards you earn may not be enough to justify the interest rates and annual fees.

This depends on the card, but some reward credit card points will expire. How long you have before they expire will vary, so it’s worth checking the expiry and making a note of it.

Most reward credit cards will work with points and free vouchers. However, there are cashback reward credit cards out there as well. These types of cards will generally reward you a percentage of what you spend on the card. This amount is typically deducted from your annual fee, or it can be converted into vouchers instead. Not all reward credit cards will offer this though so you will need to do some research to find one.

This will depend on your usage and whether the rewards offered are useful to you. A reward card may not be worth it if you struggle to pay your balance or you would get more use on a different type of card - such as a 0% balance transfer or 0% purchase card. If you find a card that helps you regularly save money on your shopping, travel or entertainment - and you can pay your balance - it could be well worth the investment.

There’s not one credit card that’s best for rewards. All card providers offer different reward incentives, so it’s best to choose one with a reward scheme that you will use. For example, if you travel a lot, it may be better to select a card that offers air miles.

Why not compare now to find the best reward credit card for you.

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