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What’s a reward credit card?

A reward credit card is a type of credit card that rewards you for using it.

These credit card perks often come in the form of cashback, points or air miles, which you earn as you spend on your credit card. Otherwise, this type of credit card works much like any other. You can spend up to a prearranged limit and, when you receive your bill, either:

  • Pay off the balance in full, in which case you shouldn’t pay interest (depending on your card’s terms and conditions)
  • Make the minimum payment, but you’ll pay interest on the balance.

There’ll be a limit to how much you can spend on your card. If you go above this limit, you may incur charges and it could affect your credit rating. It’s also worth knowing that using a high percentage of your credit limit could also lower your credit rating.

How do rewards credit cards work?

The more you spend on your credit card, the greater your rewards. But some cards – especially cashback cards – cap how much you can earn.

Credit cards connected with high-street stores or supermarkets usually offer more points for shopping in those stores. Other credit card issuers offer air miles. You can put these towards the cost of flights, holidays, spa breaks and even concert tickets.

Cashback reward cards work on the same principle, but you get money back instead. This could be cash credited to your card or current account.

Learn more about cashback reward cards.

Some cashback cards convert points into vouchers. If your credit card is linked to a store, you’ll be offered extra rewards for spending there.

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What are the different types of rewards credit cards?

There’s a wide range of rewards credit cards available, each with different benefits. Popular rewards credit card benefits include:

  • Air miles – if you travel regularly, UK air miles credit cards could earn you frequent flyer points, lounge access, upgrades or even bag you a free flight.
  • Supermarket and high street store points – M&S, Sainsbury’s, Waitrose and Tesco offer points that get you vouchers or loyalty points. If you shop regularly in one of these stores, these points could quickly add up.
  • Cashback – this gives you back a percentage of what you spend. Say your card offers 3% cashback. For every £3,000 you spend, you’ll get £90 back.
  • Flexible rewards – some credit cards let you convert your points into vouchers for theme parks, cinema tickets, rail tickets, restaurant meals and holidays. This type of rewards credit card could be ideal if you enjoy days out with the family.

How do I find the best UK rewards credit card for me?

The best credit card rewards for you will depend on your lifestyle and shopping habits, as well as the credit card perks you’re looking for. If you travel a lot, you’ll get more from a credit card that rewards you with air miles than one that offers vouchers for a store you never use.

If you’re a loyal shopper with a favourite high street haunt, or always buy your groceries at the same supermarket, it could pay to choose a credit card associated with those stores.

Rewards aren’t the only thing to consider when you compare credit cards. Be sure to check any card fees and the APR – this includes the interest rate, as well as standard charges, which shows you the total cost of borrowing.

As with regular credit cards, there are always offers available. So if you know you have an expensive purchase coming up, like a new boiler, look for a card with 0% interest on new purchases. That way you can spread the cost and enjoy rewards.

Credit card issuers often offer bonus rewards during the introductory period. But when it comes to choosing a top rewards credit card, you need to look at the whole offer, not just the incentives.

Here’s what to look for when comparing the best credit cards rewards programme for you:

  • The type of rewards you’d like to receive
  • Work out how much you’re likely to spend on the card in a year
  • Based on this, compare the rewards you’d get from each card.
    You can use our rewards credit cards comparison tool to filter results and show the cards that suit your needs.

When you compare with us, we’ll check your eligibility without it affecting your credit score. We’ll then show you the rewards credit cards you’re most likely to be accepted for.

How to compare rewards credit cards

Ready to compare rewards credit cards? It’s important to consider a few factors before deciding which one’s best for you.

Think about:

  • How many points you receive with each purchase
  • The value of the points you earn – for example, 100 points = £1
  • When and how you can access your points
  • Any fees
  • The APR.

Remember to look beyond the introductory offer. Credit card offers can be tempting, letting you accumulate many points in the early months.

But you need to see the bigger picture. What rewards can you earn once the introductory period is over? And are they the best rewards credit cards deals for you?

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What should I look out for when choosing a reward credit card?

There are a few factors to be aware of when choosing a reward credit card.

Be sure to check the APR (annual percentage rate). This is how much your borrowing will cost each year, including fees and charges. Reward cards often have a higher APR than other credit cards.

As APRs are high, reward cards work best if you pay your monthly balance on time and in full. If you only pay off the minimum each month, you’ll have to pay interest. This could far outweigh any rewards you receive.

Some credit cards charge an annual fee, but this may be offset by a long interest-free period or generous rewards. Other card providers limit how much cashback you can get, so always read the small print.

Remember, that the credit card deal you end up with will depend on your credit history.

Are reward credit cards worth it?

Whether a reward credit card is worth it depends on your circumstances and spending habits. If you regularly shop in a certain store, you could receive points for every card transaction and get vouchers.

If you pay off your balance each month, you could be earning every time you use your card. But if you don’t pay off your balance in full, the interest is likely to outweigh the benefits of earning reward points.

It might seem like a good idea to build up rewards points by spending on your credit card. But if you regularly reach your credit limit, you could find it lowers your credit rating. As a general rule, you should aim to use no more than 30% of the credit available to you.

You also risk going over your credit limit, which could mean:

  • You have to pay to extra charges
  • Your credit limit is reduced
  • You’re charged a higher APR
  • You lose interest-free offers on your card
  • You damage your credit rating.

When is a rewards card not right for me?

If you struggle to pay off your credit card bill each month, a reward card may not be right for you. Instead you might want to opt for a 0% balance transfer or 0% purchase card.

  • 0% balance transfer cards let you switch debt from one credit card to another. You pay interest on the new card at 0% for a set period, which could make it easier to reduce your debt. There might be a charge for transferring your balance and if you don’t make the minimum payment, you could lose the interest-free benefit.
  • 0% purchase credit cards are useful for buying big-ticket items as you can spread the cost of paying for them. If you’ve cleared the debt by the end of the 0% period, you won’t pay any interest.

If you’re abroad, you could be charged for using your rewards credit card outside the UK.

  • Use-abroad cards typically won’t charge fees if you use them abroad. Those that do charge tend to have low fees.

Remember, there are risks with using any credit card. These include borrowing more than you can pay back, harming your credit score by not making payments on time, being charged for late payments and paying interest.

How many rewards credit cards can I have?

There’s no limit to the number of rewards credit cards you’re allowed. But every application you make leaves a footprint on your credit record.

If you make too many applications at the same time, or even over a longer period, it could lower your credit score as lenders may assume you’re desperate for money. Having access to high levels of credit could also affect your score.

When you compare with Compare the Market, we show you the rewards cards you’re likely to be accepted for. That way you can see what’s available without damaging your credit record.

What’s the best points credit card?

If you’re looking for the best rewards credit card deals, it pays to do your research as offers change all the time.

Use our simple comparison tool to find the right rewards card for you.

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Compare the Marked Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and availability.

Frequently asked questions

Can I get bonus points from a new card?

Yes, some cashback cards have introductory offers that include a welcome bonus.

If I use a reward card, are my purchases protected by Section 75?

Some purchases made using a credit card are protected under Section 75 of the Consumer Credit Act. That means if something goes wrong, you could be refunded. But this isn’t guaranteed. It depends on the situation, along with the supplier’s terms and conditions, the Mastercard or Visa scheme rules and the card issuer.

Can I transfer a balance to a rewards credit card?

In theory, you could transfer a balance to a rewards credit card, but why would you? You won’t receive any points on balance transfers and you’ll need to pay a balance transfer fee, as well as interest on the balance.

If you want to transfer a balance, you’re better off moving it to a 0% balance transfer credit card instead.

How can I see the balance on my rewards card?

If you want to see your rewards card balance, check the app or your online account. You can also check your balance card statements.

Most credit cards let you manage your account online, making it easier to organise your finances.

How do rewards cards make money?

As well as earning money from fees and interest, credit card providers get a small commission from retailers.

What additional charges come with my rewards card?

Some credit cards – particularly those with better rewards – come with extra charges in the form of large annual fees. 

As with any type of credit card, you may also be charged other fees, including:

  • A cash advance fee for withdrawing cash from an ATM using your credit card
  • A returned payment fee if your payment bounces.

Is there a difference between Mastercard, Visa and American Express (Amex)?

Mastercard and Visa are payment processors. They don’t issue cards, but their networks handle payments made with them. American Express issues cards, as well as processing payments. Here in the UK, more people use Mastercard and Visa than Amex, which many stores don’t accept.

What are premium rewards cards?

Premium credit cards – sometimes known as black or gold cards – are given to higher spenders. They usually incur higher annual fees, but dish out bigger rewards too.

Page last reviewed on 08 AUGUST 2023
by Sajni Shah