The best reward credit cards

Updated on 15 September 2020 | 1 Comment

You may be able to get free flights, money off your supermarket shop and more with a reward credit card. We reveal the top cards and what they offer.

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 airmiles 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 a 0% 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.

If you’re more interested in cashback credit cards, check out our guide to the best cashback credit cards.

Woman using a credit card. (Image: Shutterstock)

Flexible rewards schemes

Some credit card providers, including American Express, offer points that can be converted into frequent flyer points, or allow you to use them at various retailers.

American Express offers generous points bonuses although these have been cut on its cards over the last few years.

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.

American Express Preferred Rewards Gold 

The American Express Preferred Rewards Gold card recently cut its bonus points from 20,000 to 10,000, which you get when you spend £3,000 in your first three months of card membership (this is easier said than done).  

Membership Rewards points can be converted to air miles for various airlines or used to pay for goods or services.

The annual fee is an eye-watering £140 (representative APR 56.6%), but this is waived for the first year so make sure you cancel before the year is up.

You'll also get two complimentary airport lounge visits per year with this card.

There is also a fee-free version of this card: the American Express Rewards Credit Card.

It has 5,000 Membership Rewards points on offer if you spend £2,000 in the first three months of card ownership and has an APR of 22.2%.

It’s worth flagging that you can earn and redeem extra points when you spend at certain retailers, including Boots and Currys PC World, for a limited time only.

Considering the high minimum spend, you might be better off considering the dedicated British Airways and Virgin cards below.

American Express Nectar

The American Express Nectar Credit Card (representative APR 27.3%) 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.

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 does cost £25 a year, but American Express currently waives the fee for the first year.

A first class cabin on Emirates Airlines (image: Shutterstock)

Airline and hotel reward cards

If you travel on a regular basis, 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.

British Airways American Express

The fee-free British Airways American Express Credit Card (representative APR 22.2%) offers 5,000 bonus Avios points when you spend £1,000 within your first three months of owning the card.

It allows you to earn one Avios for every £1 you spend and when you spend £20,000 or more within a membership year, you get a complimentary companion voucher.

For very high spenders, there is the British Airways American Express Premium Plus Card.

It has a higher earn rate (1.5 Avios per £1) and a higher bonus (25,000 Avios for £3,000 spent in three months) but also a very high fee of £195 per year, giving it a representative APR of 74.7%.

You’ll also earn three Avios points for every £1 spent with British Airways or BA Holidays.

Virgin Atlantic Reward Mastercard

Unfortunately, the Virgin Atlantic Reward Credit Card (representative APR 22.9%) no longer offers 5,000 Flying Club miles for your first card purchase, which may have been a huge draw for new customers.

As it's a Mastercard, it can be used in more locations than American Express cards – and sometimes even for Council Tax.

You can earn 0.75 Flying Club miles for every £1 you spend and when you spend £20,000 or more within a year, you get a complimentary companion voucher or premium economy upgrade.

If you're a very high spender, the Virgin Atlantic Reward+ Credit Card (representative APR 63.9%) has a big welcome bonus (15,000 bonus miles), a higher earn rate (1.5 miles per £1), free access to public Wi-Fi and you only have to spend £10,000 in a year to get a companion ticket.

But the card has a steep £160 annual fee.

IHG Rewards Club Mastercard

The fee-free IHG Rewards Club Credit Card (representative APR 22.9%) offers 10,000 bonus points when you spend £200 within your first three months with the card.

You can earn one point for every £1 you spend in the UK and two points at any IHG hotel and for every £1 spent abroad. 

The card gives you Gold Elite Status, which means you benefit from priority check-ins and extended check-outs.

The card also offers 0% interest for 12 months on balance transfers, but you have to pay a fee (3% or £3, whichever is greater), which isn't the greatest offer. So, if you did need to shift debt you'd be far better off choosing a top balance transfer card instead. 

Best reward cards for supermarkets and shopping (Image: Shutterstock)

Supermarket and shop points

Some supermarkets and shops offer credit cards that allow you to build up points that can be exchanged for rewards, usually at the same place.

Bear in mind that a cashback card could be better value in the long term.

M&S Reward Plus Mastercard

The M&S Bank Reward Plus Credit Card (representative APR 19.9%) gives customers points to spend on M&S shopping. 100 points is worth £1 in M&S vouchers.

You'll earn 2,000 M&S points worth £20 if you use your card within the first 90 days of card ownership, as well as double points on all your M&S shopping for the first 12 months.

What's more, the card gives you 0% on purchases and balance transfers for six months. The latter is available for 90 days from account opening, but a 2.9% fee applies (or a minimum of £5). 

In your first year, you'll earn two points for every £1 spent in M&S (one point in subsequent years) and one point for every £5 spent elsewhere.

M&S Shopping Plus Offer Mastercard

With the M&S Shopping Plus Offer Credit Card (representative APR 19.9%), you get 0% on purchases for 20 months and there’s also 0% on balance transfers for 20 months (2.9% fee, min £5).

You’ll earn one M&S point for every £1 you spend in-store or for every £5 spent elsewhere.

On top of that, you get a bonus 500 points worth £5 to spend on food, clothing or home at M&S to get you started with your credit card.

The best UK supermarket loyalty schemes

Sainsbury’s Bank Dual Offer Credit Card 

If you frequently shop at Sainsbury’s, you might like the Dual Offer Credit Card (representative APR 20.9%), but you’ll have to be a Nectar member for at least six months to apply.

Not only do you get to avoid interest on your spending for up to 20 months, you get up to 20 months interest-free on balance transfers (3% fee, min £3), as well as Nectar points.

You can earn two Nectar points for every £1 you spend on Sainsbury's shopping and fuel, and one point for every £5 spent elsewhere.

On top of this, you get a bonus 750 points every time you spend £35 or more on Sainsbury's shopping, up to 10 times in the first two months (7,500 in total).

It’s worth noting this bonus is also available with other credit cards offered by Sainsbury's Bank.

John Lewis and Waitrose Partnership Card

With the John Lewis and Waitrose Partnership Card (representative APR 18.9%), you’ll earn points to go towards John Lewis Partnership vouchers every time you spend.

Every 500 points you earn is worth £5 in vouchers. You'll earn five points for every £4 spent in-store or online at John Lewis and Waitrose and one point for every £4 spent elsewhere.

What's more, you get 0% on balance transfers for 18 months (a 2.9% balance transfer fee applies, min £5) and 0% on purchases for nine months.

Tesco Bank Purchases Card

The Tesco Clubcard Purchases Card (representative APR 19.9%) gives you 0% interest on purchases for up to 18 months.

You can also collect Clubcard points with this card, although the earnings ratio isn't great. You can collect one point for every £4 spent in Tesco and one point for every £8 spent elsewhere.

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, providing you can afford this. 

Prefer cashback? Take a look at The best cashback credit cards.

Still not found the right card for you? View our complete guide to credit cards to see all your options.



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