A simples guide

Compare Reward Credit Cards

As a nation we’re getting savvier with our shopping and brands are finding more ways to reward us and win our custom for the long term. Rewards credit cards try and do just that by giving back every time you spend with points, vouchers and discounts on certain purchases like hotel stays and even tickets to football matches.

 

If you pay your balance off every month, as 61% of British people do, then you could be benefitting from your good money management – that’s where rewards credit cards come in.

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What are rewards credit cards?

For all intents and purposes, rewards credit cards work just like any other credit card. You get a set limit, you make your purchases and you pay off the balance as normal. There is one important difference, though, the reward credit card gives you a series of reward points that you can then redeem against all manner of things that suit you.

You can get vouchers to spend in your favourite fashion store, you can get money off your weekly food shopping bill and you can get air-miles. There’s a rewards credit card for pretty much everyone, so make sure you do a thorough search and find the card that works best with your favourite shop or provider.

Even hotel chains have launched their own credit cards and they’re designed to improve customer loyalty and, of course, to maintain brand identity.

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How does it work?

You earn points every single time you use the card and you can earn more points if you shop at certain places. If you have a card issued by a major supermarket, for instance, you’ll get more points if you go there and do your weekly food shopping than you would with one of their high street partners.

Reward credit cards can work well if you’re planning on buying certain large value items where you’ll pay off the balance that month or if you naturally pay off the balance every month. Do that and the rewards come naturally, plus you get the convenience of paying on the card and using it to manage your monthly expenditure. Just make sure you check all the terms and conditions with the card to see if there are any limitations.

These cards can be a financial drain as the interest rates, if you don’t pay off the balance regularly, can be high.

These cards only really work for people that pay off their balance every month and don’t simply want to use their card as a source of free credit. If you do, then it might be worth sticking to the other cards on offer with 0% interest. 

What is the difference between a rewards credit card and a cashback credit card?

There is precious little difference between the two in theory, although many cashback cards have a low rate of return, often as low as 3%, so you would need to spend a significant amount on your card to receive a significant amount back.

Some reward credit cards can be tempting because they build towards a specific purpose. The AA, for instance, has a rewards card that provides extra points towards breakdown cover and other benefits every time you fill up with fuel. Alternatively, you can spend the rewards on the high street.

Loyalty cards are a neat trick that can serve you well, but they are designed to ensure you spend with the brand in question at both ends of the deal. Use them carefully though, and make sure you pay your balance quickly and you can enjoy the benefits of savings in the shops, on your holidays and for days out.

So start comparing rewards credit cards today with our comparison service. We’ll show you a list of the available cards ordered by the lowest APR% and give you all the details so you can easily find the reward card that suits your needs.

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