In this table, we've gathered up the "earn-rates" of different cards. It's crucial to note that how much a point is worth will depend on the card issuer, programme and potentially even how you're redeeming the points.
Our top 10 rewards credit cards compared
What are rewards credit cards?
Rewards credit cards offer you points for your everyday spending, which can then be redeemed for a variety of travel and lifestyle freebies. You could enjoy free flights and upgrades with a frequent flyer credit card, get rewarded when you shop at your favourite supermarket or get cashback on your account.
As well as offering these benefits, rewards credit cards typically come with a higher interest rate and an annual fee. So it’s smart to compare your options to make sure the benefits outweigh the costs.
How do credit card rewards programmes work?
Rewards credit cards usually earn you points for every £1 spent on eligible transactions. When you’ve earned enough points, you can redeem them for rewards such as travel, flight upgrades, gift cards, cashback and merchandise.
Most rewards credit cards also have higher standard interest rates than other options, and sometimes also an annual fee, because it costs lenders money to offer a rewards programme. Compare the potential costs of a rewards card against the potential gains, so that you can decide if the card you’re considering is going to actually benefit you.
What rewards do credit cards offer?
The rewards you can get with a credit card depend on the card you choose and the rewards programme. Some of the most popular reward categories include:
- Travel rewards: flights, flight upgrades, accommodation
- Shopping rewards: gift cards, vouchers and instant shopping discounts
- Fuel vouchers
- Specific items, such as clothes and electronics
- Tickets to concerts and other events
How can I use my credit card rewards?
The steps required to use your points to redeem rewards vary depending on the credit card and the rewards programme. But there are a few key factors to remember:
- Account login. You must log in to your credit card account or rewards programme account to make redemptions. Once you’re logged in, it’s usually a simple process of going to the “Rewards” section, then selecting “Use points” and following the prompts.
- Required points. Every reward option available for redemption has a specific point value (e.g. 10,000 points for a £50 gift card). This means you need to have at least this amount of points in your account to redeem your chosen reward.
- Points-plus-pay. Some programmes allow you to use a combination of points and money to redeem your chosen rewards. This gives you more flexibility if you haven’t earned enough points when you want to make redemptions.
Types of credit card rewards programmes
There are a variety of different rewards credit cards you can compare and choose based on the benefits you want. These can be separated into four types of reward programmes, which we’ve outlined below.
Frequent flyer programmes
Frequent flyer (or “air miles”) programmes are traditionally designed to earn you points and other benefits when you travel with a particular airline, such as British Airways or Virgin Atlantic. There are two main ways you can earn frequent flyer points with a rewards credit card:
- Direct earn frequent flyer credit cards. These cards are linked with a specific frequent flyer programme and rewards are added directly to your airline loyalty account. Frequent flyer programmes that are linked to direct earn credit cards include Virgin’s Flying Club, Lufthansa’s Miles & More and >Emirates Skywards.
- Indirect earn frequent flyer credit cards. These rewards credit cards let you transfer the points you earn to frequent flyer programmes used by multiple airlines. For example, Lloyds Bank offers a credit card that lets you collect Avios, which can be redeemed with a number of airlines.
Read our guide to frequent flyer credit cards.
Credit card rewards programmes
These enticing choices grant you the flexibility to exchange accumulated points for an variety of benefits, such as frequent flyer miles for travel, merchandise, gift cards or even credits towards your account balance.
Many of these rewards programmes also offer auto-redemption for specific rewards, such as cashback, gift cards or frequent flyer points. For example, ANZ allows cardholders to opt-in for auto-redemption through Virgin Australia’s Velocity program. With this option, all ANZ Rewards points are automatically transferred to your Velocity account annually, periodically or when you have earned a specific amount of ANZ Rewards points.
Other credit card companies offer instant redemptions with certain retailers. If you have a CommBank Awards credit card, for example, you can redeem your points in-store at Myer or Flight Centre.
Cashback with other reward credit cards
Additionally, cashback rewards are also a common feature across various frequent flyer, credit card, and supermarket or retail rewards initiatives mentioned earlier. Simply choose the “cash” or “gift cards” section within your rewards programme to explore the array of available options in this category.
In addition to your specific card’s rewards programme, credit card networks offer their own range of benefits such as Mastercard Priceless Cities and American Express Experiences (formerly American Express Invites).
How to compare reward credit cards
Comparing credit cards helps you find the features that suit your lifestyle while also keeping costs affordable. Below, you’ll find a checklist of things to consider when you are comparing reward credit cards.
- Points per pound. The more points you earn per pound spent, the greater the potential value. A good rule of thumb is to look for a card that offers at least one point per £1 for most transactions.
- Point expiry and caps. Some credit card reward points expire after a certain amount of time, and some accounts have a limit on how many points you can earn in a month or year.
- Bonus point offers. Reward credit cards often have sign-up deals that give you hundreds or thousands of bonus points. Usually, these offers require you to spend a certain amount of money on the card in the first few months you have it. As these offers only last for a limited time, they should only be considered after you have a clear idea of the type of card you want so that you can get the most value out of the deal and the rewards card you choose.
- Points values. To work out the value of your rewards, consider how many points it would take to redeem. For example, if you need 10,000 points to get a £50 gift card and your credit card has an earn rate of one point per £1 spent, you would have to spend £10,000 to make a redemption. Breaking down the rewards like this can help you determine whether it’s worth your time and money.
- Rewards partners. Rewards programmes often partner with retailers and businesses to provide you with a wider range of redemption options. You may also have the opportunity to earn bonus points when you shop with partner stores. Choose a credit card rewards programme that has partnerships with your favourite brands and products so you can take advantage of these options.
- Redemption limitations. Some reward programmes have blackout periods when you may not be able to make redemptions. Check the fine print for this information and consider the impact it could have on you.
Rates and fees
- Annual fees. Some rewards credit cards charge an annual fee. The value of the rewards you are likely to earn should be equal to or more than the annual fee of a credit card.
- Foreign transaction fees. Most credit cards apply a charge for transactions made overseas or with an international retailer online, usually worth 2% to 3.5% of the total transaction. Make sure you consider this fee before choosing a card – especially for any rewards card that offers more points for foreign transactions.
- Purchase rates. Reward credit cards often have high standard interest rates. If you think you’ll carry a balance, consider how much interest your purchases will accrue and whether the rewards will outweigh the cost of your repayments.
- Balance transfer rates. Some balance transfer credit cards also come with rewards. These cards allow you to move existing debt to the new card and pay a low introductory interest rate on the balance. Usually, you won’t earn points for the balance that you transfer, and any new purchases will be charged interest at the purchase rate from the time the transaction is made. If you have credit card debt, it may be better to focus on paying it off completely before considering a rewards card.
- Cash advance rate. If you use a rewards credit card for a cash advance transaction, such as getting money from a cashpoint, you will be charged interest at the cash advance rate, which is usually very high. Cash advances usually don’t earn reward points either.
Rewards credit cards may entail additional fees, including late payment and “overlimit” charges. It’s essential to thoroughly review these costs and consider them while making your comparisons, ensuring you opt for a card that fits within your budget.
Rewards credit cards often come with a variety of additional features that can add value to the account you choose. Popular perks include:
- International travel insurance
- Airport lounge access
- Complimentary flights
- Hotel stays
- Purchase protection insurance
- Extended warranty coverage
- Price match guarantees
- Concierge services
Is it worth getting a rewards credit card?
The value of a rewards credit card depends as much on the cardholder as the actual card you choose. So rather than making a definitive statement about whether or not reward credit cards are valuable, let’s take a look at the key factors that make them likely or unlikely to work for you.
A rewards credit card could be worth it if you:
- Pay off your credit card balance in full every month
- Currently use or plan to use a credit card on a regular basis
- Have a clear idea of the type of points you want to earn
- Are part of, or want to join, an existing reward programme that could be complemented by a credit card (i.e. a frequent flyer programme or shopping reward program)
- Earn enough to pay a higher annual fee
- Can regularly make use of the rewards or complimentary extras on the card, such as insurance
A reward credit card might not be right if you:
- Have a lot of credit card debt
- Often carry a balance on your credit card
- Rarely use a credit card
- Won’t be able to regularly use complimentary extras on the card
- Can’t afford a higher annual fee
- Are tempted to overspend in order to earn rewards
It’s worth noting that there are some exceptions to the guidelines above. If you can’t afford a high annual fee, for example, you might still get a lot of value out of a reward credit card with no annual fee. On the other hand, if you regularly use a credit card but also have a lot of debt, it might be better to switch to a balance transfer or low interest rate credit card so that you get value out of paying less interest.
Although rewards credit cards can be a useful way to gain benefits from your purchases, it’s important to bear in mind that you must repay the entire amount (plus interest, unless your card provides an interest-free period for clearing the balance). Additionally, there are annual fees and various other expenses to take into account. Nevertheless, by carefully considering both the perks and costs when comparing reward credit cards, you can find an option that suits your needs.
Frequently asked questions
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