Reward credit cards pay you back for spending you were going to do anyway. Used correctly — paying the balance in full every month — they are genuinely profitable.
- The main types
- Which card is right for you
- The golden rule
The main types
Cashback cards return 0.5-1.25% of your spending as cash. Points and miles cards earn loyalty points with specific schemes — Avios, Nectar, or American Express Membership Rewards — redeemable for flights, hotel stays, or shopping vouchers.
Which card is right for you
For simplicity, a cashback card delivers straightforward value. For regular travellers, a travel rewards card can deliver outsized value — a family travelling on Avios redemptions can save thousands against cash fares.
The golden rule
Only use a reward credit card if you pay the balance in full every month without exception. At 25-35% APR, a single month of carried balance wipes out many months of rewards. Set up a direct debit for the full balance.
Bottom line
A well-chosen reward credit card, used for everyday spending and cleared monthly, can realistically return £150 to £400 per year in cashback or equivalent value. The card should work for you, not the other way around.