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Cash in on a credit card reward scheme

A smiley face and a credit cardWith the cost of living on the increase, consumers are looking to get more for their money – and rewards when they spend.

If you pay off the debt on your plastic every month a reward card makes sense as you can get additional benefits every time you spend.

There are several different types of card currently available, and these include cashback schemes, point schemes, shopping rewards and airmiles.

New findings from Sainsbury’s Finance show there has been a dramatic increase in the number of credit cards offering a reward scheme, from 27 per cent two years ago, to 42 per cent today.

Its research shows that of those cards, 22 per cent offer cashback, 68 per cent provide a voucher system and 10 per cent offer airmiles.

Discipline pays

While this may sound very appealing, the golden rule is to ensure you pay off your statement balance in full every month, otherwise the interest charges will soon wipe out the rewards earned.

"A reward card is a great way to benefit from your spending," says Nerys Lewis, head of money at

“But it’s vital you pay off your credit card each month.”

A good way to do this is by setting up a direct debit to repay your credit card balance in full.

Choosing the right card

David Black from financial analyst Defaqto adds that it’s important to focus on the benefits offered when comparing different options.

"The key is to choose a card with the type of reward that you want, and that fits your circumstances," he says.

So, rather than spread your spending across a host of different cards, select a card where you are likely to build up a reasonable number of points – so you can exchange them for something useful.

Best cashback cards

The American Express Platinum card currently offers 5 per cent cashback in the first three months capped at £100, and then a flat rate of 1.25 per cent once this period comes to an end.

This card comes with a £25 annual fee and an interest rate of 18.5 per cent.

The Capital One World Mastercard also offers an introductory deal of 5 per cent in the first three months up to a maximum of £100. After this, the amount of cashback you get depends on the amount you spend.

Spending up to £6,000 earns 0.5 per cent cashback, spending between £6,000 and £10,000 earns 1 per cent, and spending over £10,000 earns 1.25 per cent.

There is no fee, and the rate is 19.9 per cent.

The Santander 123 card offers a staggered cashback incentive of 3 per cent on fuel spending (capped at £300), 2 per cent on department store spending, and 1 per cent on supermarket spending.

This card comes with a £24 fee and the rate is 22.8 per cent.

Other reward cards

If you’re looking for travel rewards, the Lloyds TSB Duo Avios is available with both American Express and Mastercard.

Avios is the new name for the Airmiles scheme.

"You earn one Avios point for every £1 spent on the American Express card, and one Avios point for every £5 spent on the MasterCard," says Lewis.

"If you use your American Express card as much as you possibly can you can rack up the points quite easily."

Elsewhere, you can earn one Clubcard point for every £4 you spend on the Tesco Clubcard credit card, plus extra points when used in its supermarkets.

The rewards can be redeemed against your shopping bill however, if you use them against certain restaurant or hotel or leisure activities you get up to four times the face value.

With the John Lewis and Waitrose Partnership card – and also with the Marks & Spencer Money Mastercard –you earn one point for every £1 you spend in store, and one point per every £2 spent elsewhere.

With Sainsbury’s Nectar credit card, you can earn £2 per £1 spent in store, plus one point per £5 spent elsewhere.

Check your credit rating

The good news is, if you have a squeaky clean credit record, you should be able to take your pick from the offers available.

"Typically, rewards credit cards are aimed at customers with a good credit rating," says Lewis.

If you’re unsure about your credit rating you can use’s Card Matcher tool to check your likelihood of being accepted.

Compare credit cards

Compare cards for anything from balance transfers to credit cards for people with bad credit.

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Esther Shaw

Esther Shaw

Esther Shaw is a regular contributor to and is the former deputy money editor at The Independent and Independent on Sunday. Before that, she worked as a money and City reporter on The Daily Express and Sunday Express.
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