Rewards Credit Cards

Rewards credit cards can be used just like normal credit cards, but offer rewards such as cashback, points or air miles everytime you spend.

Finding the right rewards credit card for you.

By Laura Rettie, Personal Finance Journalist.

Laura Rettie

Get cashback, points, or air miles when you spend with a rewards credit card. Learn everything you need to know with our guide. 

What is a rewards credit card?

When you spend with a rewards credit card, you'll earn points or cashback that can be used at various retailers, or air miles that you can use to get money off the cost of flights.

There are a few types of rewards cards that offer slightly different perks and benefits, but they all follow the same basic principle: the more you spend on the card, the more rewards you earn. 

With a rewards credit card, it's possible to accumulate £100s worth of points, although you need to use the card correctly and in a specific way for it to be worth it. 

What are the different types of rewards credit cards?

Knowing the differences between rewards cards can be beneficial in helping you pick the best rewards credit card that suits you and your spending habits. 

Points rewards cards

These are rewards cards where you earn points when you spend. The more you spend on the card, the more points you get. These points can then be used in-store or online to get money off your next purchase or converted into vouchers. 

Where you spend your points card may dictate how many points you get. You may get more points when used in some stores than if spent elsewhere.

When getting a points reward card, check out where the points you earn are accepted. If they can only be used at stores or restaurants you don't shop at often; the card may not be right for you. 

Cashback cards

This type of reward card is similar to a points card; however, you'll earn cash that's taken off your balance instead of earning points. You'll earn a percentage of each transaction you make. 

You may need to have your card for a year before your cashback is applied to your balance. 

If a cashback card sounds right for you, you can learn more about cashback credit cards.

Airmiles cards

These types of reward cards are usually run in association with airlines. When you use them, you'll build up points which can be used to get money off flights, hotel rooms, and car hire when you travel abroad. 

How do rewards credit cards work?

Reward cards work the same way most other standard credit cards work, with the key difference being that you earn cash or points every time you use them. You'll have a credit limit on your card and an APR that details the interest rate you'll have to pay if your balance isn't paid off in full each month. 

Reward credit cards usually require a fair or good credit rating to be approved for one. They may not suit you if you have a poor credit history.

If you have poor credit history and want to get rewards cards in the future, a credit building card may be a helpful product. When you use credit building cards and keep up with your repayments, it can help to improve your credit report

When using a reward credit card, the process will look something like this: 

  1. You use your rewards credit card to purchase some clothes from a retailer for £150. 
  2. For every £1 you spend, you get one point. This means you've earned 150 points. 
  3. Each point you earn has a value of 1p, meaning you've got £1.50 worth of points from the purchase. These points are added to the total amount of previously accumulated points. 
  4. Once you've earned enough points, you can redeem them via your credit card account online or via an app. You'll either get money off vouchers you can present when checking out, while some rewards credit cards give you the option to pay with your points directly from your card.
  5. Within a month, you'll then pay back the balance of £150 that you've borrowed from your rewards credit card. If you don't pay back what you've borrowed within a month, interest will be applied to your balance. Interest will increase the amount you'll need to pay to clear your credit card debt. 

The longer you leave your balance unpaid, the more the amount due will increase because of interest. This interest can eat away at your rewards, making these cards less beneficial. 

For example, you may have built up enough points over the year to get a £40 voucher at a specific store by spending £400 on your rewards card. However, because you haven't paid back the £400 borrowed on your card, you'll be charged interest that could increase the amount owed devaluing your £40 voucher.

Some of the top rewards credit cards will also have annual fees. You'll need to pay these unavoidable costs each year to keep the account open. These costs can range from £25-£150 a year. To make your card worth it, you'll need to use it enough to build up rewards greater than these fees; otherwise, you'll lose out. 

How do I choose the best rewards card for me?

Choosing the right reward card when comparing credit card rewards will depend on your circumstances and spending habits, including where you shop and how much you spend. 

A rewards card that offers vouchers and money off at stores you don't use isn't going to be valuable. A card that offers rewards at stores you use may be more beneficial. 

Things to think about to find the best rewards cards are to: 

Check how much points are worth

You may find a rewards credit card that offers a lot of points when you use it, making the card appear worthwhile. However, it's the value of these points that's important. 

When comparing two cards, Card 1 may offer 100 points when you spend £1, while Card 2 may give you 2 points when you spend £1. Although Card 1 looks inviting because you get more points, each point is only worth 0.1p while the points on Card 2 are worth 10p. 

This means that the 100 points from Card 1 totals 10p, and the 2 points from Card 2 totals 20p.

Even though Card 2 offers you fewer points, the points are more valuable, making it the better card. 

Find the lowest fees

Reward credit cards usually charge an annual fee. Look for the best credit card reward programs with the lowest fee because they may help you get the best value out of your rewards. 

Before getting a card, you'll need to be confident you'll use it often to earn enough points to justify the fee. 

Check the small print

Some details about your reward card may be hidden in the small print. Some cards may have an introductory period where the amount of points you earn is more than average for a short period. Other cards may only let you access your rewards at the end of the year. 

It's important to read the small print to know what to expect.

Is a rewards credit card worth it?

A rewards card is worth it under the right circumstances. 

If you use it for all your monthly spending and treat it like a debit card - where you repay what you've borrowed instantly to avoid having a leftover balance that earns interest - you can build up many points. 

You'll benefit the most if you're a loyal shopper to the specific stores the reward card offers bonus points for. 

If you're struggling to fully repay what you've borrowed each month, these cards may not be worth it. The interest applied to your outstanding balance can be high, so the debt will rise, lowering the value of any earned rewards. 

Your credit report may also suffer if you're regularly unable to repay what you've borrowed each month. 

Additionally, if you're not earning enough points to outweigh the cost of the fees for having the card, it may also not be worth it. 

If you're disciplined with your money and feel confident you'll be able to pay back what you owe each month on time and in full, reward credit cards are a great way to make your money go further. 

If you know you're not disciplined and are likely to spend more than you can afford, it's best to steer clear of any credit card because it's easy to build up debt quickly when using one. 

What are the pros and cons of rewards credit cards?


  • Rewards get you money off purchases
  • Rewards can be redeemed online
  • You get section 75 protection on your purchases. This is where purchases between £100 - £30,000 are protected and can easily be refunded if the product or service was faulty or didn't arrive. 


  • Usually need a good credit rating to be eligible
  • You may be tempted to spend more than you can afford to get the most rewards
  • There are fees if you use the card to withdraw cash or when used overseas
  • Some cards will charge an annual fee to keep the account open 
  • You'll be charged a fee for paying late

More Credit Card Options

Read more about different types of credit cards;  cashback credit cards, 0% interest credit cards, travel credit cards, money transfer credit cards and credit cards for bad credit

The information provided does not constitute financial advice, it’s always important to do your own research to ensure a financial product is right for your circumstances. If you’re unsure you should contact an independent financial advisor.

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Frequently asked questions

Do credit card rewards expire?

For some cards, the points you earn may expire, usually after a few years. If you don't use your points, you could lose them. 

On other cards, the points you earn won't expire unless you close your account. Some card providers may close your account automatically if it's not been used in a long time, removing your rewards. 

Check the terms and conditions of each rewards card to find out how long points last.

Can I get a rewards credit card with bad credit?

Getting a rewards credit card will be tough if your credit rating is poor. These cards are intended for those with fair to good credit ratings, so applying with anything less than this may mean you're rejected.

How many rewards cards can I have?

You can have as many reward cards as you want. But, it's important to remember you'll be paying more for having multiple cards because of their annual fees. 

If you have more than one reward card, you need to be confident you'll spend enough to earn rewards that outweigh the fees. Having multiple cards can be tougher to manage, and numerous applications for credit cards will leave marks on your credit report, which may put future lenders off.

What's the difference between a rewards card and a cashback card?

A rewards card is a credit card offering rewards for when you use the card for spending. These rewards can either be points redeemable at certain retailers and businesses or air miles which can be used for flights. 

Cashback cards give you back a percentage of your spending. The money from a cashback card is put back into your account and can be used to reduce your credit card balance.