nigel woollsey

Nigel Woollsey

Online Writer
Published: 11/02/2019

At a glance

  • Reward cards are a great way to turn everyday spending and planned larger purchases into real benefits.
  • Some cards have a minimum spend that you must reach before the rewards start – check the terms and conditions carefully.
  • Pay off the full amount each month to avoid any nasty interest rate surprises.

Reward credit cards can be a fantastic way to get something back from your everyday spending, giving you the chance to earn points that can be converted into anything from shopping vouchers to hotel stays, all by spending as you normally would. Here's how to make the most of them.

Choose a card that offers the rewards you want

Deciding on the card for you will take a little bit of research, for the simple reason that you're going to want to benefit from the rewards you're earning. 

Make sure you dig a little deeper so you know exactly how much points are worth, what they can be converted into, and whether there are any partner companies that will accept reward vouchers as well. You'll need to take a close look at the best rate tables and the finer details on the card's site itself, but it could be worth it!

Use the card for all normal spending

Once you've got a card that gives you the rewards you want, it's time to get spending! Don't use it as an excuse to spend more than you normally would, however – it's all about using it for normal, everyday spending, in essence using it as an alternative to debit cards or cash. That way, you can earn a huge number of points simply by spending as normal, especially at special times of the year like the Christmas shopping season.

Keep tabs on what you're spending to make sure you don't blow your budget, but also keep an eye that you're meeting the spending requirements of the card. Some even offer bonus points if you spend a certain amount in the first few months, for example.  

Pay off the balance IN FULL each month

This is perhaps the most important thing to remember – you need to make sure that you pay the balance off in full every single month, otherwise you'll be charged interest that could easily eat into the benefits you've earned and could even outweigh them completely. Ideally, you'll want to set up a direct debit to repay the balance, as that way, you needn't worry about forgetting.

Don't "borrow" for more than a month, or withdraw cash

In line with the above, you want to make sure that you're not actually "borrowing" from the card for too long; instead, you'll want to treat it as more of a debit card, safe in the knowledge that you can pay it off and earn rewards at the same time. Similarly, never use these cards to withdraw cash, as you'll likely be charged a hefty interest rate and a fee as well – even if you pay it off afterwards.

Make sure your credit score is up to scratch

Before you apply for that new card, you'll want to make sure your credit score is as good as possible, thereby maximising your chance of acceptance and reducing the possibility of earning a black mark on your credit history.

To do that, you'll need to contact a credit check provider, so you can check your report and see if there are any areas you need to improve on. For example, you'll need to make sure that you're on the electoral roll at your current address and that there aren't any discrepancies on your file, and you may need to close old accounts that are no longer used.

So, are you ready to get more from your everyday spending? Remember that this route should only be considered by those who are fully able to repay any outstanding balances each month, but if you're confident you can make that kind of commitment, find the best reward credit cards and see the kind of benefits you could earn.

Pros and cons of reward cards

  • Get rewards for your normal spending.
  • Several companies offer their ‘own’ branded credit card with in-store rewards at your favourite place to shop.
  • If you aren’t paying off your balance in full every month the interest rates charged on your debt can be hefty.

Moneyfacts tip

Moneyfacts tip nigel woollsey

Don't use your reward card as an excuse to overspend, but if you've got a big festive shopping trip planned, you could rack up more points with ease!

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

woman carrying shopping bags

At a glance

  • Reward cards are a great way to turn everyday spending and planned larger purchases into real benefits.
  • Some cards have a minimum spend that you must reach before the rewards start – check the terms and conditions carefully.
  • Pay off the full amount each month to avoid any nasty interest rate surprises.

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