About Rewards Credit Cards
What is a rewards card?
A rewards card is simply a credit card that offers rewards when you spend. There are various types of rewards credit cards on offer; shopping points, cashback, airmiles and Avios points.
How do the rewards differ?
Cashback Cashback credit cards offer a percentage of your spend back in cashback. Some cards offer higher levels of cashback on certain spending such as petrol or supermarkets, and some offer a flat level of cashback on all spending, so it’s worth thinking about how much you spend in a month and where you spend it to maximise your reward.
Airmiles Airmiles credit cards allow you to earn miles as you spend, which can then be redeemed to buy or partially fund flights. They often have introductory offers of extra bonus miles the first time you use your card, but it’s worth noting that airmiles aren’t equal to real miles – most airmiles credit cards will have a calculator on the site showing you the conversion rate. Some of the schemes don’t allow you to use the miles on certain airlines so it’s worth taking that into account before you apply.
Avios points Avios was formed when British Airways merged with Iberia. Avios points can be earned in a similar way to airmiles, and can be exchanged for airmiles towards flights or for hotels, activities and wine cases.
Shopping points A shopping reward programme will often centre around one particular retailer or group, such as the Sainsbury’s credit cards. They may offer rewards when you spend elsewhere but commonly offer higher rates of rewards when you spend in the retailer linked to the card.
Are there any drawbacks?
The way each card promotes their reward scheme can sometimes make it complicated when trying to decide which is the best card for you. Some of the rates are dependent on you spending over a certain amount each month, whereas some cards are only worthwhile if you spend a lot in certain shops, so it’s worth thinking about how and where you spend your money before you take out a new card.
Rewards credit cards typically have a high representative APR as they are aimed at customers who pay their balance off each month, so if you don’t clear your balance each month then any reward will be offset by the amount of interest you’ll pay.
Can everyone get a rewards card?
Rewards credit cards are generally aimed at those with a good credit rating. If you’re unsure of your credit rating you can use our free Card Matcher tool to check your likelihood of acceptance for all the credit cards on our panel.
You can also check your credit rating for free to find out what you can do to make sure you get the credit you want.
Which providers offer rewards cards?
Many credit card providers offer cards with rewards, including AA, British Airways and American Express.