Compare our best rewards credit cards and treat yourself

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:

1. 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.
2. 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 a 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.

Finder survey: Which of the following points do you collect?

Network rewards

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.

Best way to earn rewards points with your credit card

There are several ways to unlock rewards with a credit card. We have outlined the most common below:

• 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 1 point per £1 for most transactions. But remember to only spend as much as you can afford to repay, otherwise you’ll accrue more interest.
• 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.

Redeeming points

• 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 at least be equal to, but ideally 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% 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. What’s more, this interest rate is charged from the day of the transaction, so even if you pay off your balance in full that month, interest is still charged. Cash advances usually don’t earn reward points either.

Complimentary extras

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

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Our expert says: Shift as much everyday spending to reward cards as you can

"The value you receive from reward credit cards comes when you spend on them. So long as you’re sensible with your money (and are able to pay off your credit cards in full each month to avoid interest), the more of your day-to-day spending that you can put on them, the better!

Monthly subscriptions such as Netflix are an easy one to move over. If you commute to work, you can also pay for that on your credit card to earn some rewards from your travel costs. Even your normal household bills such as those for council tax, water and energy could earn you rewards, if you have the option to ‘top up’ your account balance online with a credit card.

Earning cashback or points on things that need to be paid for anyway is a good way to make the most of your reward credit cards."

Jordon Cox

Contributor

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.

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.

Bottom line

Rewards credit cards can be hugely beneficial, but only if they’re used the right way, which generally means using them for spending you were planning anyway. Crucially, you should never spend more on a rewards credit card than you can afford to repay and always choose a rewards programme that you’re likely to get the most out of. You should also ensure you pay off your balance in full each month to avoid high interest charges and, if the card has an annual fee, make sure the benefits of the card outweigh this.

Frequently asked questions

• How can I view and manage my points?

  Most rewards programmes allow you to view your points through an online account. Usually, you need a membership number or username and password to log in. Once you’ve logged in, you should be able to view your points and redeem them for the desired rewards.

• Can I convert my points to frequent flyer points or rewards with another issuer?

  Some credit card reward programmes allow you to transfer points to frequent flyer programmes, while others will be linked exclusively to a particular airline and its partner services. Read the terms and conditions or contact your rewards programme provider directly to confirm where else you can earn and use your points.

• How many points will I need for a particular item or flight?

  The number of points you need depends on your credit card and the reward(s) you want to redeem. For flights, most frequent flyer programmes have a points calculator available on their website. If you enter your preferred route and ticket status, the calculator can determine how many points you’ll need to cover the flight.

  When it comes to other types of rewards, most programmes have an online catalogue that allows you to browse the rewards on offer and see how many points you need to redeem them.

• I've redeemed a reward with my points, but now I've changed my mind. Can I refund my points?

  This will depend on the credit card, but generally you can’t refund rewards or points once the transaction has been made.

To make sure you get accurate and helpful information, this guide has been reviewed by Rachel Wait, a member of Finder's Editorial Review Board.

Written by

Chris Lilly

Head of publishing

Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio

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Chris has written 609 Finder guides across topics including:

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