The best reward credit cards
If you fancy being rewarded for your spending, take a look at these credit cards.
Spending on a credit card doesn’t have to involve getting into lots of debt. In fact, if you pay off your credit card bill in full each month, you can be rewarded for your spending, either via cashback or rewards such as flights, holidays and days out. For more on cashback cards, go to The best cashback credit cards.
Here are the best reward credit cards to have in your wallet right now.
Supermarket and shop cards
If you are a keen Tesco shopper, the Tesco Clubcard credit cards might be right up your street. They allow you to collect Clubcard points as you spend, so for every £4 you spend anywhere in the world, you’ll collect one Clubcard point.
But it doesn’t end there – your credit card also doubles as a standard Clubcard so you’ll collect points on your Tesco purchases too. At the moment you can earn five points for every £4 you spend at Tesco and on Tesco fuel.
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You can then convert these Clubcard points into Avios points, days out, meals out, and much more. You can view the full list here. The representative APR is 16.9%.
Sainsbury's and American Express Nectar
If you shop at Sainsbury’s, however, you may want to take a look at the Sainsbury’s Low Rate Nectar credit card instead.
It currently offers ten Nectar points for every £1 you spend in Sainsbury's, up to a maximum spend of £1,000 a month (so you can earn a maximum of 10,000 points a month), providing you use it in conjunction with your Nectar card. You can also earn eight points for every £1 you spend on fuel, plus an extra point per litre. After that initial period, you'll earn four points for every £1 you spend in Sainsbury's and two points for every £1 you spend on fuel and one point per litre. The representative APR, as the name suggests, is a low 7.8%.
Meanwhile, the American Express Nectar credit card is currently offering 10,000 Nectar points as a welcome bonus when you spend £1,000 in the first three months. You can then earn four points for every £1 you spend at Nectar partners including Sainsbury's, BP and Homebase. You get two Nectar points for virtually every £1 you spend elsewhere. However, it does charge an annual fee of £25, meaning it has a representative APR of 25%.
You can then redeem Nectar points on easyJet flights, holidays, restaurant outings, trips to the cinema and more – view the full list here.
If you're a regular M&S Shopper, the M&S credit card offers one M&S point for every £1 you spend there and a point for every £2 you spend elsewhere. Every 100 points gives you a £1 M&S voucher. The representative APR is 15.9%.
The John Lewis Waitrose Partnership card gives you one point for every £1 you spend at John Lewis (in-store and online), Waitrose (in-store and online) and Greenbee.com. You earn one point for every £2 you spend elsewhere. Every 500 points is worth £5 in John Lewis/Waitrose vouchers. It's obviously one of your most popular credit cards, as it recently won the Most Loved credit card category in the 2012 Lovemoney Awards. The representative APR is 16.9%.
Other rewards schemes
American Express Preferred Rewards
If you put most of your spending on your plastic and you like to travel, you might also consider the American Express Preferred Rewards Gold charge card. This card gives you roughly one Membership Reward point for every pound you spend. You can spend these on flights (although you'll need to pay taxes and fees), hotels, shopping gift cards, and luxury items. You can also transfer them to other schemes such as Avios and Nectar on a one-for-one basis. Apply now and you'll receive 20,000 points if you spend £2,000 in the first three months.
You'll also get two complimentary airport lounge passes in your first year. And you can currently earn double points on all major supermarket and petrol spending during your first year.
However, while Amex is currently waiving the £125 annual membership fee, it will be charged if you don't cancel the card after a year. You should also note that as this is a charge card, not a credit card, you HAVE to pay off your balance in full each month. If you're planning on making a big purchase early on, you need to contact Amex first.
To be eligible, you need an annual household income of at least £20,000 a year and to qualify for the 20,000 point bonus you can't have held another American Express charge card in the past six months.
Barclaycard Freedom Rewards
The Barclaycard Freedom Rewards credit card offers points for your spending, which you can redeem with 70 partners. You earn three points for every £1 spent at selected stores (what Barclaycard calls its Lifestyle Booster partners), two points for every £1 spent in supermarkets and petrol stations and one point for each £1 spent everywhere else.
The LifeStyle Boosters include Strada, Bella Italia, Currys, PC World, Goldsmiths, Café Rouge and BHS.
Rewards start with a £5 voucher for 1,750 points. And if you spend £500 on the card in the first three months, you’ll get 10,500 Reward Points (worth £30).
You can spend the vouchers at partners including Boots, Debenhams, M&S, Next, Odeon and Premier Inn. There's a full list on the Barclaycard website. The representative APR is 18.9%.
NatWest and RBS YourPoints
There are also the NatWest and Royal Bank of Scotland YourPoints World MasterCards. These give you one point for every £1 you spend on your card. Right now, you'll get 2,500 points (worth £12.50) when you take out the card, double points for your first nine months and another 2,500 points after your first year. Your points earn you vouchers for shops including Amazon, M&S and Boots (2,000 points gets you a £10 voucher) or flights on a variety of airlines. It costs around 11,000 points for a UK flight (compared to 9,000 Avios and 10,000 Amex Membership Rewards), but that does include taxes and charges, which the others don't. The representative APR is 17.9%.
MBNA More Rewards
You get two cards with the MBNA More Rewards scheme – an American Express and a Visa. You collect two More Rewards points for every £1 you spend on the Amex and one point for every pound you spend on the Visa. You'll also earn double points on all your spending for the first 90 days after account opening.
There are apparently over 35,000 reward options. These range from vouchers for high street shops including Argos, Boots, Debenhams, Next and Sainsbury's to money off holidays at Thomas Cook to days and nights out. You can also earn gadgets such as a Kindle Fire or iPod Nano (both for 24,000 points). The representative APR is a low 12.9%.
Airline reward cards
If you travel on a regular basis, there are plenty of reward credit cards that will help you to earn free flights (just paying fees and charges on top) or holidays.
Many of these are part of the Avios rewards programme, which replaced Airmiles and BA Miles. Once you’ve collected enough Avios you’ll be able to turn them into a flight, which start at 9,000 Avios for a return UK/Western Europe flight. You can see how many Avios you’ll need for every destination here. However, you should note that taxes, fees and surcharges are not included on Avios flights, so you'll need to pay a minimum of £30 per person on top.
Lloyds TSB Duo Avios
Let's look first at the Lloyds TSB Duo Avios credit cards. If you apply for these cards, you’ll be sent two cards – an American Express and a MasterCard (for those times American Express isn’t accepted).
You’ll receive one Avios for roughly every £1 you spend on the American Express card and one Avios for every £5 you spend on the MasterCard. Spend £500 a month for the first three months and you'll get 15,000 Avios, enough for a return flight to Western Europe (although you'll have to pay £30 on top). The representative APR is 17.9%.
One of the best offers at the moment in terms of instant rewards is the Flybe credit card. Apply before 30th April and spend on it (even £1) and you'll get a free return flight to selected destinations in the UK and Europe (although you'll have to pay taxes and fees).
You then collect one Rewards4All point for every £250 you spend on the card. Collect 16 points and you'll get a return economy flight (taxes and fees on top) to destinations in the UK and Ireland. Collect 24 points and you'll get a flight to Europe (excluding Spain, Portugal and Croatia). The representative APR is 18.9%.
Ryanair's credit card also offers flights when you spend. If you spend £100 in the first 90 days, you'll receive a voucher for a return flight (you'll have to pay taxes and charges on top). If you spend £3,000 in a six-month period (these run from 11th December-10th June and 11th June-10th December), you'll receive two flight vouchers. So you could earn up to five flight vouchers in your first year. The representative APR is 19.9%.
Virgin Atlantic offers an American Express and a Visa with its White Card. You earn one Flying Club Mile for every £1 spent on the Amex card and one Flying Club Mile for every £2 spent on the Visa. You'll get a bonus of 3,000 Flying Club Miles with your first purchase. The representative APR is 17.9%.
Motoring reward cards
If you’re a motorist, check out the AA Rewards credit card as with this card, you’ll receive AA Reward points as you spend. You’ll earn one point for every £1 you spend on motoring purchases (servicing, tyres, MOTs, repairs and fuel) and one point for every £2 you spend anywhere else.
If you’re an AA member, however, you’ll earn two points for every £1 spent on motoring purchases, and one point for every £1 spent anywhere else.
You can then redeem these points for AA products (such as insurance) or motoring and travel essentials (such as roof racks and child car seats) or treats (such as days out and high street vouchers) or cashback, although the cashback isn't as generous as the leading cashback cards. Find out more here. The representative APR is 16.9%.
A final word of warning
Finally, remember, if you’re using a reward 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 earned.
This is a classic lovemoney article that is regularly updated
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