The top credit card reward schemes pay you £3 for every £100 spent on them, an easy way to make £100s or £1,000s a year just by changing plastic. Yet some use impenetrable points systems to disguise poor payouts.
This guide intensively analyses every major scheme to calculate the best buys for frequent flyer points, cash, and more. It includes our RewardsChecker tool, which compares all the schemes.
Best Reward cards
How long will these cards last? This guide is fully up to date. However, there is a chance some card firms could cut rewards in future, as the EU has capped the charges providers can levy on shops each time you use their plastic, which funds rewards. Capital One has already said it’ll cut cashback for some customers. So enjoy rewards while you can.
How reward cards work
The premise is simple. Spend on one of these cards and they pay you - some of these cards even pay you cashback. Do it right and you can earn £100s worth of goodies each year, at no cost. If you're debt-free and pay off every month, you might as well get paid to spend.
It sounds great - everyone loves something for nothing. But unless you're careful, cards will actually deliver nothing for something, as there are a couple of major holes to watch for.
The reason cards give rewards is to encourage spending, as do that and they can charge us 15% interest or more and retailers up to 1%. So always follow…
Getting charged interest almost always dwarfs even the very best reward schemes, so quite simply…
If you want rewards, always set up a direct debit to repay the card in full each month, so there's NO interest.
Sadly, some card providers deliberately miss the 'repay in full' option off their direct debit forms. If so, just write 'pay off in full' and send it in. It should be honoured, but call to check.
It's also worth watching for any annual fee. These are now rare, and everyone except very high spenders should avoid any card with one. The cost isn't usually recovered by the extra rewards.
Can't repay in full every month?
If you're not sure you can always repay the card in full, then DON'T pick a card for rewards. Focus on a card with a lower interest rate instead. - see the 0% Credit Cards guide.
As applying for any financial product has a minor credit score impact (see the Credit Scores guide), if you have existing credit card debts, it's also worth prioritising making them cheap before going for rewards by doing a balance transfer.
Don't believe the hype
Some schemes are focused on making people think they're earning large, when actually payouts are pretty paltry. To what extent depends on the type of scheme.
Here you earn days out, flights, holidays or more by getting points - and that's where the problems start, as Martin points out...
"For a TV programme stunt I was once asked to design a credit card that looked good, but contained hidden, abysmally anti-consumer traps. Many signed up to my fake MACS card (SCAM backwards), which promised TWELVE points per pound spent.
"Most people didn't ask what the points were worth. In fact, they were worth 0.0001p. In other words, nothing. And 12 nothings… is nothing.
"It's this lack of transparency that allows reward schemes to create a magical 'something for nothing' mystique. A Sainsbury's Nectar point is worth up to 1p compared to a Tesco Clubcard point worth up to 4p, so one Clubcard point is worth almost eight times more than the Nectar points.
"That's what this guide focuses on; a mathematical evaluation of every scheme to pick the real winners."
Cashback or cash-lite cards
With cashback cards you earn cash each time you spend, and it's then usually paid once a year as a lump sum (see the Top Cashback Cards guide). The main advantages are you know exactly what you're getting and can spend the rewards anywhere.
Cash-lite schemes are where money earned can be converted into gift vouchers or can only be spent in a specific store, eg, M&S.
Many credit cards offer incentives such as free flights or electronic goods for you to sign up to the card. Therefore if you've a good credit score, just take advantage by signing up even if you don't want the card. A full list of what's available is in the Credit Card Freebies guide.
Best buy credit card reward schemes
These results are based on evaluating over 40 schemes, calculating the actual value of the rewards for spending. This is done by first number-crunching what an individual point's really worth, then how many points you get when you spend.
Read more about the valuation process
Evaluating credit card rewards
The strength of a rewards card is derived from three main factors; the value of a point in the scheme, how many points a card gives you when you spend, and how useful the rewards are for you.
We researched, number-crunched then evaluated all major rewards schemes and cards to uncover the real return you get. We've split the top payers into categories, enabling you to pick the best-suited card.
This consistent methodology has been used to compile this guide for over five years.
Calculating how much a point is worth
Seven rewards were randomly selected and valued per scheme. The valuation assigned is its 'real' rather than recommended retail price. For example, while a points provider will often list a CD as being worth £13, if it's commonly available for £7, we only value it at £7.
These were then used to evaluate the points' worth. For example, if 6,000 MSE points get you a £24 MP3 player, then one point is worth around 0.4p. The average value of a point over the seven goods is then calculated.
Calculating how good a scheme is
Once we know what a point is worth, it is a question of establishing how many points you get when you spend.
For example the Torvill scheme may have points worth a penny, for which you gain one per £1 of spending.
Meanwhile the Dean scheme has points worth 16p, but you only get one per £20 of spending.
So spend £100 on each card and the Torvill scheme gives you £1 worth of points and the Dean scheme 80p.
When estimating annual rewards, any annual fee the card may charge is subtracted.
Only includes currently available card incarnations
This research was published in June 2014, and included all major rewards cards open to new customers at that point. Yet it's possible you may have an older, now unavailable card which pays better rewards, so always check.
If you spot a card that you think merits inclusion, please email email@example.com.
The rewards are measured in percentages. So a 1.5% reward means you get an average £1.50 worth of points for each £100 spent.
Unless stated, all cards were judged on annual spend of £10,000; very achievable if you lump all your normal spending on it. Plus it incorporates annual fees and unless noted, introductory bonus points. We've separated the top deals into categories.
This is the top cashback card currently available. This card has a big intro bonus. For full options see the Top Cashback Cards guide.
Highest paying fee-free card but you need to spend big to win
Amex Plat Everyday* 5% for 3mths then up to 1.25%
If you want to earn cashback while spending but don't want to pay for the privilege of doing so, then this fee-free card from American Express* pays new cardholders a massive 5% intro cashback for the first three months. And after three months, the amount of cashback you'll earn depends on how much you spend, but you can earn up to 1.25%.
Need to knows
- You earn 5% for the first three months (max spend £2,000).
- Overall you need to spend at least £3,000 to receive cashback.
- After the intro period, you earn 0.5% cashback on spending up to £3,500/year.
- Spending between £3,501 and £7,500 will get you 1% cashback per year.
- All spending above £7,501 in a year will earn 1.25% cashback per year.
- Make sure you repay in full EVERY month to avoid the 19.9% representative APR, or interest will quickly wipe away the cashback gains.
Consistent top cashback rate but you need to pay to get the card
Amex Platinum* 5% for 3mths then 1.25%
This American Express* Platinum Cashback card is different to the card above because it pays 1.5% cashback regardless of how much you spend. But while the flat rate is a big plus, there is a £25 annual fee which wipes away some of the gain - and if you happened to spend less than expected, you'd still be hit with the fee, making this card less profitable than the Amex card above.
Need to knows
- You earn bonus 5% cashback for the first three months (max spend £2,000).
- If you spend over £10,000 in a year, you'll also get unlimited 2.5% cashback in your anniversary month.
- All spending including the fee, is 18.7% rep APR.
Earn points to spend at Argos, Debenhams, Topshop & more
MBNA More Rewards 2pts for every £1 spent
Rather than giving cashback, this MBNA More Rewards gives you points each time you spend on it. The points are then converted into vouchers which you can spend at a variety of retail stores. This card comes with both an Amex and a Visa card, but try to only spend on the Amex as you'll earn more points using that card.
Need to knows
- You earn four points per £1 for the first 90 days on the Amex card. After that, you earn two points for every £1 spent on the card.
- You earn two points per £1 for the first 90 days on the Visa card. After that, you earn one point for every £1 spent on the card.
- 2,000 points gets you a £10 voucher.
- You can redeem the points for cash too, but you'll need 5,000 points to get £20 back and Top Cashback Cards beat this.
There are a variety of different schemes, but part of the choice depends on which airlines you prefer and their availability, as often the big gain comes from using credit card points along with points from frequent flying.
Watch out for taxes and charges, as all reward schemes make you pay these on top. In some cases (especially if you're travelling within Europe) it might be cheaper to fly with a budget airline instead of paying for the tax on top of using your Avios points. Read the Cheap Flights guide to see if you can get cheaper flights. We've only listed the top fee-free card but you can earn more airline rewards with other cards which charge a fee. Frequent flyers read the Airline Credit Cards guide for all our top cards.
Top fee-free card if you like to travel plus free companion flight at £20k+ spend
If you fancy yourself as a bit of a jet setter then the BA Amex* card can reward you with free flights. Plus, if you're accepted you can get 9,000 bonus Avios points. But you need to be quite flexible with your dates as seats can be limited. You can also get a 'free companion' ticket if you spend £20,000/yr on the card.
Need to knows
- You'll earn 1 Avios point per £1 spent on the card.
- Spend £1,000 within the first three months and you'll get the bonus 9,000 Avios points.
- Spend £20,000/year, and you get one free 'companion ticket' when booking a flight. The free ticket can be used to get the same ticket type as the cardholder (if you go first class, so do they), though only on BA. But you'll still need to pay taxes and charges on top.
- Compare other frequent flyer cards in the Airline Credit Cards guide.
- See more ways to Boost Your Avios Points.
Some cards only give rewards, vouchers or cash for certain retailers or when spending in a particular store. They can be useful if you're a creature of habit, and like to do your weekly shop at the same place every week.
Good if you're a die-hard Tesco shopper, plus long 0% on spending
Tesco Clubcard* 5pts for every £4 spent in Tesco
If every week you're at your local Tesco doing the food shop then it may be worth paying for that shopping on the Tesco Clubcard* credit card as it gives you extra clubcard points on top of the normal clubcard points you would normally collect.
Need to knows
- Earn five Clubcard points for every £4 you spend on it in Tesco including Tesco petrol.
- Earn one point for every £4 spent elsewhere.
- One point is worth 1p (so just a 1.25% return) if spent instore at Tesco, but boosts to up to 4p (so 5%) if redeemed for some of Tesco's special Clubcard Rewards vouchers. These can be used for a huge array of mainly entertainment-based treats.
- There's also 19 months 0% on spending, which means you only have to pay the minimum balance each month and you won't be charged interest. But after the 0% period ends you must repay the card in full or you'll be charged 18.9% rep APR (some poorer credit scorers could get up to 23.9%)
Boost for Sainsbury's shoppers plus 0% on spending
Sainsbury's Nectar* 2 pts per £1 spent in Sainsbury's
If you prefer to shop at Sainsbury's then the Nectar Bonus* credit card gives you a slight boost on the Nectar points you earn when shopping there. Plus you'll get 18 months 0% on spending, so you won't have to repay the full balance each month, and you won't be charged any interest. But only do this if you are disciplined and will save the money so you can fully repay at the end of the 18 months.
Need to knows
- Earn two Nectar point for every £1 you spend in Sainsbury's, or one Nectar point for every £5 elsewhere.
- You can redeem the points with other retailers in the Nectar scheme, such as PizzaExpress, Argos, eBay, Eurostar and more - and in some cases the point value increases.
Earn up to 1% back in Waitrose/John Lewis vouchers
John Lewis/Waitrose 1 point for every £1 spent here
Similar to the cards above you earn points each time you spend on the Partnership credit card. But you'll earn John Lewis/Waitrose vouchers instead - so perfect if you like to shop in either one of those stores.
Need to knows
- You earn one point for every £1 spent in John Lewis/Waitrose and one point for every £2 spent elsewhere.
- The points are converted into vouchers three times a year and can be spent at John Lewis, John Lewis Direct (online) and Waitrose.
- Always pay off the card in full every month, or the rewards points are wiped by the 16.9% representative APR.
Free M&S voucher worth £5, plus points on spending
M&S* 1 point for every £1 spent in M&S
Currently, accepted new cardholders can earn lots of rewards on this M&S* credit card. As well as earning points on your spending, you'll also get a £5 M&S voucher. You'll also get 19 months 0% on spending.
Need to knows
- You'll earn one point for every £1 spent in M&S stores, and one point for every £2 spent elsewhere. These points are then converted into M&S vouchers every three months.
- After 19 months, you'll be charged 18.9% representative APR if you don't pay the card of in full.
- To get the £5 voucher you need to spend once in either food, clothing or home, and you'll get 500 bonus points, which is converted into a £5 voucher.
Shopping at Asda can earn you 1% cashback
Asda Money 1% cashback
The Asda Money card offers a reasonable cashback rate, especially if you're an Asda shopper. You can also earn more cashback if you take certain insurance products or travel money with Asda, but never use this as an excuse to get these with the store. Instead, always check if you can get these cheaper elsewhere as the cashback bonus isn't that great.
Need to knows
- Earn 1% cashback on all shopping done instore and online, or on Asda fuel. All other spending attracts 0.5% cashback.
- You'll be charged 18.9% representative APR if you don't pay the card off in full at the end of each month.
Some cards give rewards specifically for spending on fuel and motoring. They can be useful if you spend big or often.
Pays big cashback on fuel & travel BUT has £24/yr fee
Santander 123* - 3% cashback
If you spend a lot on fuel travelling to work or driving the kids around, then it's worth paying for this on the Santander 123* credit card as it gives 3% cashback when you fill up your tank or spend on rail travel. As an added perk there's a massive 23 months 0% on spending, but watch out as there's an annual fee, which will eat into some of the cashback you earn.
Need to knows
- The max cashback you can earn on petrol is £9/month.
- You also earn 2% cashback in major department stores and 1% in major supermarkets. See a full review of the cashback you can get with Santander 123.
- There's a £24 annual fee but Santander 123 bank account holders get the first year refunded.
- After 23 months you'll pay 12.7% interest on spending (16.5% representative APR, including the annual fee).
Linked to bank accounts
Some cards require you to have the issuing bank's current account to be eligible for the card. But it's usually not worth switching just to get the rewards on the credit cards - however, the two cards below are associated with some of our top pick bank accounts, so if you're switching anyway, see these cards as another perk on top.
Flat amount given back when you spend
Halifax Rewards Clarity*
If you have a Halifax current account, you could also get the Halifax Rewards Clarity* credit card which gives £5 a month cashback for every month you spend £300 on the card. The card is in fact the same as the Halifax Clarity credit card, a best buy in our Travel Credit Cards guide, and 'Rewards' is a benefit that is automatically applied if you fulfill a number of conditions.
Need to knows
- To qualify, you either need to hold or switch to a Halifax current account and pay £1,000 a month into it, or the Halifax Ultimate Reward current account (costs £15/month, see our Premium Bank Accounts guide to check if it's worth it).
- Switching to a Halifax current account will also net you a £125 bonus.
- Make sure you pay off in full at the end of each month, or you'll be charged 18.9% representative APR on your statement balance, which'll quickly negate the reward.
Earn 0.5% unlimited cashback and load free spending abroad
If you already hold a Nationwide current account then you could also get Nationwide's Select* credit card which gives 0.5% cashback on all your spending. Alongside the Halifax card mentioned above, this card is also a best buy in our Travel Credit Cards guide. But it's not worth getting the current account just for this card as the cashback can be beaten.
Need to knows
- To qualify, you need to hold a Nationwide FlexAccount current account and pay £750 a month into it (and have done so for the last three months), or the Nationwide FlexDirect (no fee, pays interest) or FlexPlus (£10/month) current account.
- The Nationwide FlexAccount comes with free UK and European travel insurance.
- There's also 15 months 0% on spending. After this you'll be charged 15.9% representative APR so ensure you clear the card before the interest kicks in.
Boost the value of your points
By correctly targeting the right rewards to redeem your points on, it is possible to substantially increase the amount. To find out how to do this for all schemes and specific info for Nectar, Avios and Tesco, read the Boost Your Loyalty Points guide.
Use the card for all spending
Once you set up a credit card, every time you use it you get paid. While this isn't an excuse to 'spend more', it does mean from now on…
Use the rewards card for ALL normal spending, replacing cash, cheques, and other debit, credit and charge cards.
For those who have work expenses they need to reclaim, this can be a powerful way to earn more, at no cost to you, provided you can cope with paying the bill in full each month.
There's extra protection on all spending too…
There's another big bonus to using a rewards card. You actually have far more consumer protection. This all comes about due to what's called Section 75 of the Consumer Credit Act 1974. It says…
75. - (1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.
Which of course, reads like gobbledegook… yet in a nutshell means:
Buy something costing over £100, here or abroad, and pay on a credit card, and the card issuer's equally liable if something goes wrong.
Now this protection only applies to credit cards, not debit cards or any other plastic and it's hugely important, especially in the current credit crunch climate. It means order something and if the retailer went kaput, you'd still be able to claim your money back from the card company. Read a full guide on Section 75 Refunds.
Think before adding the 'insurance'
Payment protection insurance is commonly sold with credit cards - the idea is it'll make some payments for you, usually for a year, if you are unable to (eg, if you lose your job).
There have been a myriad of cases where it has been mis-sold. Some borrowers didn't realise they were signing up for it, or it was totally unsuitable for them. Some big lenders have been fined.
The protection isn't always bad, though policies sold by credit card companies are often overpriced (you pay a monthly amount depending on the size of your balance). If you want it, compare the lender's cover with standalone providers such as Paymentcare or Best Insurance.
Always be vigilant to check you aren't getting more than you bargained for when you fill in the application, then check your statement each month to check you aren't inadvertently paying for extras if you didn't ask for them.
Reward cards Q&A
I'm in debt, is it OK to use a reward card alongside my debt card?
Can I transfer a balance to a reward card?
There's little point in doing so - you don't earn points on balance transfers.
Many reward credit cards try to tempt you with competitive balance transfer offers, they want you to both spend and shift debts to the card. It'll end up costing you as you're unlikely to be able to afford to repay the card in full. Instead use a separate card for Balance Transfers.
How do they make money if I always repay?
The second source of income for card companies is the retailer. When you pay on a credit card, it gets between 0.1% and 5% of what you spend from the shop/restaurant and this will often cover the cashback.
Therefore in a way all you're doing is getting back the extra that's been factored in to pricing for all customers to cover credit card costs.
Generally, the bigger the retailer the less it pays, as it has more negotiating power with Visa or Mastercard. Also it's worth noting Amex tends to charge retailers more, one of the reasons some smaller companies don't accept it.
How many reward cards can I have?
As many as you're accepted for, there's no limit. Though of course, every card application has a small impact on your credit score. So the more you have, the less likely you are to be accepted for more cards.
Don't apply for lots if you may need credit for something important such as a mortgage or a balance transfer card. Full info in the Credit Rating guide.
Is it worth going for a card that gives bigger rewards in one store?
If you spend a substantial amount of money in a store then it certainly is worthwhile. But don't let this blind you for the rest of your spending, make sure you maximise what you get elsewhere too (it may be worth having two cards).
Also remember lots of cards use a 'double earn' promise, so it looks like you get more points using your credit card in the linked store, but actually you would've got the same just using its normal loyalty card. See the Loyalty Points guide for a full explanation.
Can I withdraw cash on a reward card?
Again, you don't earn reward points for withdrawing cash on one of these credit cards.
What you do earn is a hefty fee, big interest, and a note on your credit file that you've withdrawn the cash.
The rule's simple: never, ever, ever use credit cards for cash withdrawals.
How often is this research done? What if it changes?
The research was last done in June 2014. However if there are any major changes to any of the headline cards listed, we update those specifically.
Where credit cards or loans use a representative APR, this means that 51% of successful applicants will be given the stated interest rate.
With credit cards, the rate for purchases (as opposed to balance transfers or cash withdrawals) is used as the main rate to advertise the card.
So if that is described as 19.9% representative APR, then 51% of people accepted will get 19.9% APR, but 49% will get a different rate (likely to be higher).
Loans are slightly simpler as they only have one rate. So if a loan is advertised as being 7.5% representative APR, this means 51% of accepted applicants will get 7.5%, and 49% will get a different rate (likely to be higher).
Of course, some people will be rejected outright for the card or loan too.
Credit card minimum repayments
From 1 April 2011 the rules on credit card minimum repayments changed. For customers getting a new credit card agreement the monthly minimum repayment must be AT LEAST:
- 1% of the debt
- Plus the amount of interest that appears on the statement
- Plus charges for missed payments, going over limit or defaults
- Plus any annual fees
This is a minimum, so card companies can charge more if they wish.
Some card providers (including Barclaycard, MBNA and Santander) have applied these changes to existing card holders too.