Reward credit cards can be a handy way to earn hundreds of pounds worth of perks when you use them for everyday spending.
There are a lot of different types of reward credit cards on the market, so you should choose wisely to make sure you earn benefits that are valuable to you.
For example, you can get free air miles or extra loyalty points to use at your favourite supermarket.
It’s worth stressing that reward cards are ideal for those who are confident that they can pay off the full amount every month to avoid paying interest, which can be higher compared to other credit cards.
You generally don’t get an interest-free period, so it’s vital you pay back what you owe in full every month.
In this article, we’ll reveal what types of reward cards are available on the market and what you should expect.
Interested in cashback credit cards? Check out our guide to the best cashback credit cards.
Flexible reward schemes
Some credit card providers offer points that can be converted into frequent flyer points or allow you to use your card at various retailers.
American Express offers generous points bonuses, but these have been cut on its cards in recent years, while the interest rate has been hiked on most cards.
But they still have a big advantage as you can use your points with American Express at a range of places, instead of specific airlines, hotels, or supermarkets, plus you can usually get bonus points if you refer a friend.
The lender’s Plan It tool also allows you to choose a transaction (or an amount) from your most recent statement and pay in instalments over three, six or 12 months.
Note, this amount must be £100 or more, and you’ll also pay a fixed monthly fee for the service (which will be displayed when you set up your plan).
American Express Nectar
As the name implies, the American Express Nectar Credit Card (representative APR 37.8%) can help you build up Nectar points.
You earn two Nectar points for virtually every £1 you spend, which increases to at least three points when you shop at Nectar partners with your credit card and loyalty card.
What’s more, spend £2,000 in your first three months with the card and you’ll pocket a bonus 20,000 Nectar points.
The card costs £30 a year, but American Express currently waives the fee for the first year.
American Express Preferred Rewards Gold
American Express will give you 20,000 bonus points when you sign up to its Preferred Rewards Gold card and spend £3,000 in the first three months.
Membership Rewards points can be converted to air miles for various airlines or used to pay for goods or services.
You can earn one Membership Reward point for every £1 you spend on purchases, two points for every £1 you spend directly with airlines or in a foreign currency and three for every £1 you spend at American Express Travel.
The annual fee is an eye-watering £195 (representative APR 88.8%), but this is waived for the first year so make sure you cancel before the year is up.
You'll get four complimentary airport lounge visits per year with this card, plus up to £10 cashback per month via an exclusive Deliveroo offer – find out more here.
Cardholders can also get 2,500 Membership Rewards points for every £5,000 of eligible spending up to five times a year.
There is also a fee-free version of this card: the American Express Rewards Credit Card.
It has 10,000 Membership Rewards points on offer if you spend £2,000 in the first three months of card ownership and has an APR of 31%.
You can earn one Membership Reward point for every £1 you spend on purchases.
American Express Platinum Credit Card
The American Express Platinum Credit Card (purchase rate 31%) offers free travel insurance, up to £150 to spend in selected UK restaurants and an extra £150 to spend in selected overseas restaurants, plus late checkout in hotels.
But this card is only suitable for those who can spend heavily and clear their debt in full each month, especially as the card comes with a whopping annual fee of £650.
It’s worth stressing a pro-rata refund is possible if you choose to cancel the card early.
You can get one Membership Reward point per £1 spent with this card and two points per £1 spent with Amex Travel Online.
On top of this, you can also get 40,000 bonus points when you sign up and spend £6,000 on the card within the first three months.
Airline and hotel reward cards
If you travel regularly, there are plenty of reward credit cards that will help you earn free flights, cabin upgrades or hotel stays.
You can find out more about airline frequent flyer schemes here.
Barclaycard Avios
With the fee-free Barclaycard Avios card (representative APR 29.9%), you can collect 5,000 Avios points if you spend £1,000 in the first three months of owning the card.
You can collect one Avios point for every £1 spent on eligible purchases. Plus, if you spend £20,000 within a year, you can choose a reward of either a British Airways cabin upgrade voucher or 7,000 bonus Avios.
You can redeem your Avios for rewards, including flights, car hires, upgrades and hotel stays.
Barclaycard Avios Plus
With Barclaycard Avios Plus (representative APR 80.1%), you’ll get 25,000 Avios points if you spend £3,000 in the first three months of card ownership. This card has a fee of £20 a month.
You can earn 1.5 Avios points for every £1 spent on eligible purchases, get access to airport lounges at a discounted rate, plus you only need to spend £10,000 within 12 months to get a British Airways cabin upgrade voucher or 7,000 bonus Avios.
Again, you can redeem your Avios for rewards, including flights, car hires, upgrades and hotel stays.
British Airways American Express
The fee-free British Airways American Express Credit Card (representative APR 31%) offers 5,000 bonus Avios points when you spend £1,000 within your first three months of owning the card.
This credit card allows you to earn one Avios point for every £1 you spend and when you spend £12,000 or more within a membership year, you get a complimentary companion voucher or a 50% discount on the Avios price you pay if travelling solo.
For very high spenders, there is the British Airways American Express Premium Plus Card (representative APR 113.1%).
It has a higher earn rate (1.5 Avios points per £1) and a higher bonus (25,000 bonus Avios points if you spend £3,000 in the first three months), but it also has a very high annual fee of £250.
You can earn three Avios points for every £1 you spend with British Airways or BA Holidays, plus you’ll only have to spend £10,000 in a year to get a companion voucher or a 50% discount on the Avios price you pay if travelling solo.
If you're a British Airways Executive Club member, you can also earn additional Tier Points by spending on the card. Earned on top of Avios, Tier Points give you access to travel perks such as lounge access and priority boarding.
While only spending on flying had previously qualified for Tier Points, the offer now applies to all spending.
You can earn these additional points on spending of between £15,000 and £25,000. Be aware this offer ends on 21 May 2024.
Virgin Atlantic Reward Mastercard
With the fee-free Virgin Atlantic Reward Credit Card (representative APR 26.9%), you can earn 0.75 Virgin points for every £1 you spend plus 1.5 points for every £1 you spend with Virgin Atlantic or Virgin Holidays.
You'll get a complimentary companion voucher or upgrade when you spend £20,000 or more within a year.
As an alternative, the Virgin Atlantic Reward+ Credit Card (representative APR 69.7%) has a big welcome bonus (15,000 points when you make a purchase within the first three months of card ownership) and a higher earn rate (1.5 points per £1). You'll also get three points for every £1 you spend with Virgin Atlantic or Virgin Holidays.
On top of this, you only have to spend £10,000 in a year to unlock exclusive benefits.
Be aware, the card has a steep £160 annual fee.
Supermarket reward cards
Some supermarkets and shops offer credit cards that allow you to build up points that can be exchanged for money off your shop or rewards, usually at the same place.
Bear in mind that a cashback card could offer better value in the long term.
Asda Money Select Credit Card
With the Asda Money Select Credit Card (representative APR 34.9%), you’ll get 1% of your Asda shopping spend back in ‘Asda pounds’ but only 0.3% on spending elsewhere.
You'll also receive an additional £20 in Asda Pounds if you spend £60 and set up a Direct Debit within your first 60 days of card ownership. This offer ends 13 May.
You can convert Asda Pounds into money-off vouchers via the Asda Rewards app – these vouchers can then be used online and in-store.
Earn cashback at Asda without a credit card: join the Asda Rewards loyalty scheme.
John Lewis and Waitrose Partnership Card
The John Lewis and Waitrose Partnership Card (representative APR 27.9%) allows you to earn five points for every £4 spent at John Lewis and Waitrose. You'll also earn one point for every £4 spent elsewhere, as well as get a £5 voucher for every 500 points you collect.
The card also offers 0% interest on new purchases for the first six months.
M&S Shopping Plus Offer Mastercard
With the M&S Shopping Plus Offer Credit Card (representative APR 23.9%), you'll get 0% on purchases for 18 months and 0% on balance transfers for 15 months. The latter is available for 90 days from account opening and a 2.99% fee applies (or a minimum of £5).
You’ll earn one M&S point for every £1 you spend in-store or for every £5 you spend elsewhere. You can earn extra points if you’re an M&S Club Rewards customer, but it costs £10 a month to be a member.
The best UK supermarket loyalty schemes
Tesco Low APR Credit Card
If you're a fan of the supermarket and want to avoid expensive interest on your spending, this card could be worth a look.
As well as charging a rate of just 10.9% on purchases, it allows you to earn Clubcard points almost every time you shop.
You'll receive five points for every £4 spent at Tesco, one point for every £4 spent on Tesco fuel (plus an additional point per litre), and one point for £8 of spending elsewhere.
Be aware, you'll receive the same rewards with other Tesco credit cards, so it's worth shopping around for the right card for your needs.
A final word of warning
Finally, remember, if you’re using a rewards credit card, always ensure you pay off your bill in full each month to avoid being hit with a hefty interest charge, which will wipe out the rewards you’ve managed to build up.
An easy way to do this is to set up a Direct Debit that pays off the balance in full every month, provided you can afford this.
Prefer cashback? Take a look at The best cashback credit cards.
If you would rather earn cashback through your current account, check out the best bank accounts for cashback.
Still not found the right card for you? View our complete guide to credit cards to see all your options.