Reward Credit Cards

Are you searching for the best rewards credit cards in the UK?

If you’re someone who regularly repays your credit card balance in full and on time each month, you may have wondered whether you could get rewarded for your spending.

From cashback to points or air miles, our guide explores the different types of rewards credit cards.

What is a rewards credit card?

A rewards credit card does what it says on the tin: offers certain rewards for using your credit card to make a purchase.

There is an array of rewards credit cards on the market, and each offers a different perk.

What sort of rewards could I get with a credit card?

Here are just some of the possible benefits that could be available through various rewards credit cards.

Cashback
Cashback is when you earn a percentage of the amount spent on your credit card. The cashback percentage will vary between providers and may not be eligible on every purchase. Here’s an example: your credit card offers 2% cashback, and you make an eligible purchase of £250. In this instance, you’ll get £5 cashback.

Points
Collect points when you purchase at selected retailers. Points could be converted into high street vouchers or discounts on future purchases. Your credit card provider will be able to tell you where you can pick up your points and if there are any restrictions to consider; for example, whether you must spend over a certain amount to be eligible for the points.

Air miles
Are you a regular jetsetter? If so, you might be interested in doing some research into credit cards that offer travel-based rewards, such as access to airport lounges or air miles that could be redeemed against the cost of a flight.

Store schemes
Some high street stores offer rewards credit cards that may interest loyal shoppers. Typically, each time you spend with that retailer, you’ll gain points, which can then be converted into vouchers.

How do rewards credit cards work?

Rewards credit cards can be used in the same way as ‘standard’ credit cards, with the added perk of earning points or cashback along the way.

1. Use your rewards credit card to make manageable purchases that you need and can afford to repay.
2. Earn rewards with each eligible purchase.
3. Your rewards summary may be shown on your monthly statement or on your online account.

Things to think about before applying for a rewards credit card

• If you are late making your monthly repayment, you could lose access to your rewards.
• You should never spend more money than you need to or can afford to repay.
• Pay particular attention to the credit card’s interest rate. If you don’t repay your balance in full and on time each month, you’ll be charged interest. You should weigh up whether the interest rate you’ll be charged will be worth any rewards you might be entitled to.
• Some rewards credit cards may come with an annual fee. Be sure to read through the terms and conditions of your chosen rewards credit card before you sign the credit card agreement. Again, you should check whether the cost of the annual fee is worth the potential rewards.

Will a rewards credit card affect my credit score?

Using any type of credit card will have an impact on your credit score. If you make at least the minimum repayment amount due on your credit card balance each month, you could see an improvement in your credit score over time. It’s also important to stay well within your credit limit – that’s the total amount of money you’re able to spend on your credit card. Making a late repayment or missing one altogether will cause your credit score to decline.

If you’re aiming to boost your credit score, you may wish to make more than the minimum repayment each month and keep your credit utilisation as low as possible. Your credit card utilisation is the amount of credit you are currently using and is shown as a percentage of your credit limit.

Example: if you had a credit card with a credit limit of £2,000 and you spent £1,000, your credit card utilisation would be 50%.

Am I eligible for a rewards credit card?

Every provider will have their own eligibility criteria, but typically, you may be able to apply for a rewards credit card if you:

• Are over the age of 18;
• Are a UK resident. Please note that some providers will request a minimum of three years’ worth of UK address history;
• Have a UK bank account and valid debit card; and
• Have a regular source of income paid into your bank account.

Having a good credit score could be a requirement for some providers of rewards credit cards.

Can I get a rewards credit card with bad credit?

Getting approved for any type of credit card can be tricky when you have bad credit. Some credit card providers specialise in credit cards for people with bad credit, although you should be aware that these could come with a higher interest rate and lower credit limit.

What happens if I can’t keep up with the repayments on my rewards credit card?

If you’re struggling to make the repayments on your rewards credit card, you should stop using it and contact your provider. There may be things they can suggest to help ease the pressure while you get your finances back on track.

I’m worried about money; where can I get advice?

Free, confidential debt and money management advice can be accessed through several charities and organisations, such as StepChange, MoneyHelper, Citizens Advice, and National Debtline.

If money troubles are bothering you, please remember that you can seek help, whatever you’re facing. You don’t need to go through this alone.