How to get more from your rewards credit card


Rewards credit cards are growing in popularity in the UK.


You can earn valuable points with a rewards card simply by using your credit card for everyday purchases, such as your weekly grocery shop or to fill up your car. You can then exchange these points for a range of benefits, including air miles, vouchers or cash-back earnings.

To get the most out of this type of credit card, however, and avoid falling into debt, you must use the card strategically. Here are four key tips for getting more from a rewards card:

1. Pay off your balance each month
The best reward credit cards can earn you great benefits, including cash-back earnings or air miles. However, one of the biggest mistakes that you can make using this type of card -- which tends to come with a higher APR -- is to maintain a balance on your accounts.

If you don't pay off your balance in full every month, you could well be paying interest of between 10 and 20% on your spending. This could equate to hundreds of pounds every year in interest charges.

And no matter how much you earn in cashback or in air miles, it is unlikely that the value of the rewards you earn will exceed any interest payments you're making on your cards.  

2. Use your card as often as you can
Most rewards credit cards award points based on the amount you spend on your card. Cash-back credit cards typically allow you to earn a percentage of the amount you spend on your card, whilst airmiles credit cards generally award miles based on your total spending.

No matter what type of rewards card you are using, however, you will get more out of it if you use it as often as you can. You can also earn a significant amount of points by using the card for large one-off items, such as electrical goods or holidays.

3. Use affiliated retailers
When you're looking for a new rewards card, you can maximise your rewards by choosing a card affiliated to a retailer that you visit regularly. Many rewards credit cards offer bonus points if you use your card at certain retailers.

For example, the Sainsbury's card offers more Nectar points per five pounds spent at the supermarket than if you use your card at other retailers. Similarly, the card offers twice the number of Play points for purchases at the online retailer than if you use the card at other online or High Street stores.

4. Use the card immediately
Many rewards credit cards come with bonus introductory offers that award additional points when you use the card in the first few months. It's not unusual for credit cards with cash-back earnings to offer an increased rate in the first few months or for other rewards credit cards to offer bonus points if you spend a certain amount on your card in the first three months.

See related: Credit card applicants partial to loyalty schemes; Is a rewards credit card right for you?

Published: 7 June 2011