Many or all of the products and brands we promote and feature including our ‘Partner Spotlights’ are from our partners who compensate us. However, this does not influence our editorial opinion found in articles, reviews and our ‘Best’ tables. Our opinion is our own. Read more on our methodology here.
Rewards credit cards offer customers extra perks every time they spend, usually in the form of rewards points or vouchers, which can be redeemed at a selection of retailers. Some of the best-known rewards include Air Miles, which you can exchange for free flights and upgrades.
Used carefully, these cards can be a great way to get rewarded for your everyday spending, such as fuel and grocery shopping. However, the benefits can quickly be cancelled out by interest and other charges, so it’s important to check how the benefits stack up before you apply.
Partner Spotlight Compare Credit Cards
NerdWallet has partnered with Monevo. Compare credit cards without impacting your credit score.
A limited number of credit cards are included in this comparison service, others are available in the market. Some of the results shown will confirm your eligibility, while others may require further checks.
The best rewards credit cards
The cards listed below are ordered by the value of rewards earned during the first year, fees, and APR. Be aware that you may be offered a higher APR than advertised.
The reward value earned in the first year is calculated by Fairer Finance, using average household spending data from The Office for National Statistics. This figure includes bonus rewards, minus the annual fee. Be aware that the value of rewards may be lower in the following years after the end of any promotional period.
Provider | Representative APR | Rewards | Fees & Charges | Value | |
|---|---|---|---|---|---|
 | 701.4% Representative Example | Earn 60,000 Membership Reward Points when you spend £6,000 in your first three months of membership. | £650 annual fee | £970.99 | |
 | 66.7% Representative Example | Earn 5 points per £1 spent. 5 x points for spending with Yonder partners, 1 x points for spending elsewhere. 10,000 bonus points worth £50 at Yonder Experiences. | £15 per month | £722.72 | |
 | 24.9% Representative Example | Earn Rewards Points every time you shop at M&S which will be converted into M&S vouchers. For the first six months earn 5 Rewards Points per £1 spent at M&S. After this, earn 1 point for every £1 spent at M&S. | M&S Club Rewards Membership costs £10 per month | £358.34 | |
 | 28.9% Representative Example | Earn 5 points for every £4 spent on eligible purchases at John Lewis and Waitrose and 1 point spent elsewhere. Earn 500 points to receive a £5 voucher. Earn double points on eligible spend at John Lewis and Waitrose for the first 60 days. Get £40 in John Lewis and Waitrose vouchers when you open an account and spend a minimum of £250 on eligible purchases at John Lewis and Waitrose within 45 days. | n/a | £188.47 | |
 | 23.9% Representative Example | Get 2,500 welcome points worth £25 when you make your first transaction. Earn up to 10 points for every £1 you spend at selected retailers. Get 1 point for every £5 you spend elsewhere. Spend £10,000+ on your card in the first year and get 2,500 anniversary points. Earn these anniversary points for each of the first five years you have your card. | n/a | £88.40 |
This table is checked and updated regularly. We aim to provide accurate information but prices, terms and conditions of products and offers can change, so double-check first. Credit card data is provided by Fairer Finance.
The best Air Miles credit cards
The cards listed below have been ordered by the value of rewards earned during the first year, then fees, and then APR. Depending on your circumstances you may be offered a higher APR.
The cashback earned in the first year is calculated by Fairer Finance, using average household spending data from The Office for National Statistics. This figure includes bonus rewards, minus the annual fee.
Provider | Representative APR | Rewards | Fees & Charges | Value | |
|---|---|---|---|---|---|
 | 69.7% Representative Example | 1.5 Virgin Points for every £1 spent on everyday purchases. 3 Virgin Points for every £1 spent direct with Virgin Atlantic or Virgin Holidays. Earn 18,000 bonus points with your first purchase made within 90 days of taking out the card. | £160 annual fee | £2,107.86 | |
| | 139.2% Representative Example | 1.5 Avios on every £1 spent. 3 x Avios per every £1 spent with British Airways or BA Holidays. Collect 30,000 bonus Avios when you spend £6,000 in your first three months of card membership. Get a companion voucher when you spend £15,000 each membership year on the card. | £300 annual fee | £1014.36 | |
 | 80.1% Representative Example | Collect 1.5 Avios for every £1 you spend on eligible purchases. Spend £10,000 on your card within 12 months and choose between a British Airways cabin upgrade voucher or 7,000 bonus Avios. If you’re new to Barclaycard, collect 25,000 Avios when you spend £3,000 in the first three months. | £20 monthly fee | £993.32 |
This table is checked and updated regularly. We aim to provide accurate information but prices, terms and conditions of products and offers can change, so double-check first. Credit card data is provided by Fairer Finance.
What is a rewards credit card?
Rewards credit cards get their name because they reward you for spending money. The more you spend, the more rewards you earn – and these can be redeemed at selected retailers or exchanged vouchers, flights, hotel rooms and car hire.
- Rewards credit cards: This type of credit card rewards you with points when you spend. These can be redeemed with a variety of retailers. Supermarkets such as Tesco, Sainsbury’s, and stores like M&S and John Lewis offer this type of card, and usually reward customers with extra points when they spend in store.
- Air Miles credit cards: This is a popular type of reward credit card because you can earn free ‘Air Miles’ as you spend, which can be exchanged for free or discounted flights and upgrades.
How do rewards credit cards work?
Whenever you make a credit card payment, the card issuer (Mastercard, Visa or American Express) is paid a small fee for processing the payment. When you have a rewards credit card, the provider shares some of this fee with you, via points which can be redeemed for discounts with major retailers or airlines, or vouchers for cinema tickets, theme parks and eating out.
Some card providers offer introductory promotions, which means you can earn more reward points for the first few weeks or months after opening the account. Others may cap the amount you can earn, or offer extra points for spending in particular stores.
In return, some providers can charge an annual fee, require you to spend a minimum amount before you earn rewards, and may expect you to redeem points within a set time. There’s also a risk that you could forfeit your rewards if you miss a minimum monthly payment.
As long as you’re not at risk of overspending or missing payments, you can maximise the rewards you earn by using your card to cover your everyday spending. However, you must clear the balance in full each month before being charged interest because reward credit cards typically come with a high APR.
You can use a rewards credit card in much the same way that you would use any other type of credit card: use it to shop in-store or online, up to your credit limit. Each month you will be sent a statement detailing how much you’ve spent, and the minimum payment that you need to make. Your statement will also show how many points, or how much cashback, you have earned and when they will expire, if applicable.
How to choose a rewards credit card
Before applying for a rewards credit card, first consider which is best for you. Ask yourself the following questions to help you make a decision:
- Can you pay your bill in full each month? If not, you could pay more in interest than you earn in rewards. In this case, another option, such as a 0% interest purchase card, may be a better choice.
- Which rewards are you most likely to use? For example, some rewards credit cards only allow you to redeem points with certain retailers – so it’s important to check that it suits your shopping habits. For example, earning points when you do your regular supermarket shop could be a useful way to knock some money off your grocery bill, but you’re less likely to benefit from earning points that you can only spend with a retailer you shop with infrequently. If you’re considering a card offering Air Miles, check which airlines you can use.
- Is there an introductory offer? This can help you to earn more rewards if you’re planning a large purchase. Some providers offer an introductory points balance which could be worth over £100.
- Is there a fee or a minimum spend? Some providers charge an annual fee, although this may not be charged for the first year. Others require you spend a minimum amount before you can earn rewards. Check the terms and conditions carefully, and work out how much you stand to save before you apply.
Advantages of rewards credit cards
Rewards credit cards have some advantages, compared to other types of credit cards:
- You could earn rewards worth hundreds of pounds just by using your card for everyday spending.
- Introductory offers can be generous, so if you’re planning a large purchase it can be a great way to earn extra rewards.
- Different cards offer different types of rewards, including Air Miles and redeemable points, so you can choose the reward that suits you best.
- You can sometimes boost your rewards by spending in certain stores.
- You will be covered by Section 75 of the Consumer Credit Act 1974 when you make a purchase with a value of between £100 and £30,000, which means you won’t be out of pocket if the retailer goes bust or there’s a problem with your order.
- Managing your card well can help to improve your credit score over time.
Disadvantages of rewards credit cards
Rewards credit cards also have some disadvantages:
- Rewards cards may have a higher APR than other types of credit cards, so unless you pay your bill in full you could save more with a 0% interest purchase card.
- Some rewards cards charge an annual fee, or require a substantial minimum spend before you’re able to earn points.
- Unless you pay your bill in full each month you could easily end up paying more in interest than you earn in rewards.
- You could lose your rewards if you miss a monthly repayment.
- You may only be able to redeem your rewards with a limited selection of retailers.
- Your reward points may have a very low cash equivalent.
- You may have a limited period of time when you can redeem your rewards before they expire.
Am I eligible for a rewards credit card?
Rewards credit cards are widely available to those with good credit scores, and some providers also offer credit cards for bad credit.
Before you apply, use an eligibility checker to find out how likely you are to get the card you want, along with an indication of your credit limit and APR. This won’t appear on your credit report, and will help to protect your score as it reduces the chance of an unsuccessful application.
Although eligibility criteria vary between providers, in general you will need:
- To be over 18.
- A UK resident.
- Have a permanent address.
- To be earning a minimum annual income.
- Not declared bankrupt or have any recent individual voluntary agreements (IVAs) or County Court Judgements (CCJs).
It’s also important to check your credit score. This three-digit number is used by lenders when deciding whether to offer you credit. Several different factors influence your credit score, including missed or late payments, defaults or high use of credit.
Checking your credit score can also reduce the risk of an unsuccessful application by allowing you to spot errors that need to be corrected, or take steps to improve your score. You can check your credit score for free with credit reference agencies like Experian and Equifax, or via platforms like ClearScore and Credit Karma.
How to apply for a rewards credit card
Depending on the card you choose, applying for a credit card can usually be done online. Alternatively, you can sometimes apply in person at a branch of the relevant bank. The provider will run a credit check, so you will need to share some information including:
- Your contact details.
- Your address (including all addresses for the last three years).
- Your bank account details.
- Your income.
You could get an instant decision when you apply online, but you may have to wait a few days to find out if your application has been successful.
If your application is approved, you will need to sign a credit agreement. You can usually do this digitally when you apply online, otherwise you will be sent paperwork to sign and return. Before you sign, check your credit limit, APR, any fees and charges and the minimum monthly payment as these might be different than advertised.
Don’t sign unless you’re happy with everything, because you can walk away with no obligation. You have a 14-day cooling-off period, so even if you change your mind after you’ve signed you can cancel the agreement without explaining why. However, you will need to repay any money you have borrowed, plus any applicable interest.
If your application isn’t approved, don’t try again with a different provider right away. Each application you make leaves a mark on your credit report, and several applications in a short period of time can give lenders the impression that you’re experiencing financial difficulties and make it even harder for you to get credit.
Instead, check your credit report to see what you could do to improve your credit score, and use eligibility checkers before your next application to reduce the risk of being turned down again.
How to use a rewards credit card
The following five tips will help you make the most of your rewards credit card:
- Pay your bill in full every month
The rewards you earn will probably be wiped out by the interest your provider charges if you don’t pay your bill in full each month. Ideally, set up a direct debit to repay in full each month.
- Use your card for everyday spending
To maximise your rewards, use your rewards credit card in place of your debit card to cover everyday spending. Just ensure that you’re not spending more than usual, and can clear your credit card bill in full.
- Boost your rewards
Depending on the card you have, you may be able to boost the rewards you collect by shopping in certain stores, redeeming your points or vouchers at particular times or year, or swapping your points for vouchers. You could also earn more by referring a friend, completing surveys, or taking advantage of bonus offers.
- Check for fees and spending limits
Before you apply for a rewards credit card, check if you will be charged any fees for using the card, if there’s a minimum amount you need to spend before you’re eligible for rewards, and if there’s a time limit before your rewards expire. Only continue with the application if you’re confident that you will spend enough to qualify, while still being able to clear your balance in full each month.
- Pick rewards that work for you
We all love a freebie, but you won’t really notice the benefit unless you’re earning rewards that are valuable to you. Whether that’s discounts at your regular supermarket, vouchers or Air Miles, think carefully about how much you stand to earn – and how you will use your points – before you apply.
Is a rewards credit card right for me?
Unless you can be confident that you’re disciplined enough to repay your credit card bill in full every month, then a rewards credit card probably isn’t the right option for you. In fact, you stand to make more savings with a card that will help you save money on interest, such as a 0% interest purchase card, or a balance transfer credit card.
If you’re already struggling financially, and are tempted to apply for a cashback and rewards credit card because it seems like a good way to access some extra cash, this could quickly make your situation worse as your debt will increase.
Before you apply, consider all your options, including seeking free debt help from charities such as:
Rewards credit cards frequently asked questions
Your credit limit is based on several factors, including your credit score, income and affordability, as well as the lender’s policy. Using an eligibility tool before you apply may give you an idea of the credit limit that you are likely to be offered. You can find these on the provider’s website or on comparison sites.
There are several different types of credit cards available, including 0% interest purchase cards, balance transfer credit cards, credit builder cards, and credit cards for bad credit. Some prepaid credit cards also offer rewards, and you can also collect reward points by signing up for a loyalty program at a number of stores and supermarkets.
Typically, the credit cards that offer the most generous rewards charge an annual fee and require a minimum spend before you can collect rewards. For this reason, consider what the ‘best rewards’ would look like to you. Ultimately, the best rewards are the ones that you will use – and that won’t cost you any extra money in interest or fees. So you may want to narrow down your search to look for the best credit card for points, or the best credit card for Air Miles.
Depending on the type of card you have, there are various ways to spend your reward points. In some cases, these can be transferred into vouchers which can be spent in specified stores, while other providers allow you to redeem points to pay for flights, hotels, travel costs or gift cards.
No, if you buy something and return it your rewards balance will be adjusted to reflect the final amount you spent.
Although you will usually need a good credit score to qualify for the best rewards cards, some providers do offer these cards to people with poor credit scores. Use an eligibility tool before you apply to reduce the risk of an unsuccessful application, and think carefully about whether you can afford to clear your balance in full each month – if you can’t, your rewards are likely to be cancelled out by interest and other charges.
Yes, some providers expect you to spend your rewards within a set time period, so check the terms and conditions to make sure that you use them before you lose them.
Image source: Getty Images
About the Author
Dive even deeper
Compare Best Cashback Credit Cards
Best Credit Cards In the UK, October 2024
