Rewards credit cards pay you back a small percentage of what you spend, but only if you clear the balance every month. Interest on a carried balance is usually far bigger than the rewards, so the best credit cards for rewards UK shoppers can get depend on how you spend and how you repay, not on the headline offer.
The sums that matter
A card paying 1% cashback returns £10 on £1,000 of spending. If you carry £1,000 for a month on a card charging around 25% APR, the interest is roughly £20. One month of interest wipes out the cashback on about £2,000 of spending. This is an illustration, not a quote, so check the representative APR on any card you consider.
Three kinds of reward
- Cashback. Money back as a percentage of spending, sometimes higher at certain retailers or during the first months. It is the easiest reward to value, which is why the best credit cards for rewards and cash back are usually the simplest to compare.
- Points. Collected and redeemed for vouchers, products or transfers to partners. Their value depends heavily on how you redeem them.
- Air miles. The best rewards credit card airline miles offers can beat cashback if you travel and redeem sensibly, but seat availability and the taxes and charges added to reward flights eat into the value.
What to check before you apply
- Annual fee. Some rewards cards charge one, and the rewards you earn must exceed it.
- Representative APR. At least 51% of people accepted get the advertised rate or better, so you may be offered a higher one.
- Earn rate and caps. Look for monthly limits on cashback and for bonus categories that change.
- Welcome offers. Check how much you must spend, and by when, to earn the bonus.
- Overseas fees. Charges for spending abroad can cancel out rewards if you travel.
- Eligibility. Rewards cards generally need a good credit score. Use a soft-search eligibility checker first, so a decline doesn't leave a hard search on your file.
Use the protection as well as the rewards
Section 75 of the Consumer Credit Act 1974 makes the card provider jointly liable with the retailer for purchases costing between £100 and £30,000 that you pay for, even partly, by credit card. That protection can be worth more than the rewards, so put larger purchases on a credit card you will repay in full.
Matching a card to your habits
- Low spending and no wish to think about it: a no-fee cashback card.
- Heavy spending on groceries or fuel: when comparing the best reward credit cards UK providers offer, look at category bonuses and read the caps.
- Frequent travel: price one real trip two ways, with miles and with cashback, before you choose.
- Carrying a balance: skip rewards altogether and look for the lowest APR or a 0% offer.
The best rewards credit cards UK providers advertise are only worth having if you repay in full. If you are rebuilding your credit rather than chasing rewards, see our guide to credit cards for bad credit in the UK.