A rewards credit card gives you the opportunity to earn something back as you spend. This can be airmiles, loyalty points or – in the case of cashback credit cards – straight cash paid back to your card account.
This means that, used in the right way, reward and cashback cards can occupy a welcome place in your wallet.
What are the best cashback and rewards cards?
But what are the best cards of this kind out there? We’ve carried out some research (October 2021) to find some of the top offers on the market (although, equally, the best for you will depend on how you prefer to benefit).
Bear in mind also that these cards require particularly healthy credit scores. Not all applicants will qualify for the best cashback and rewards deals at the advertised Annual Percentage Rates (APRs), as rules state that these APRs must only apply to 51% of successful applicants.
You could also be turned down completely.
Always use an online eligibility checker to assess your chances of being accepted first, as this won’t leave a footprint on your credit report which can potentially put off other lenders.
Here are some of the top offers we found.
1. American Express Platinum Cashback Everyday Card
Cashback rate: 0.5% cashback (from £3,000 to £10,000); 1% cashback (above £10,000)
Upfront bonus: 5% (up to £100) in first 3 months
Representative APR: 24.5% (variable)
At an ongoing 0.5% to 1% (depending on how much you spend) this Amex card offers the joint best cashback rate on the market.
If you’re looking to make a large one-off purchase, the 5% bonus rate is also unbeatable. And there’s no annual fee to pay either.
The cashback you earn will be paid into your credit card account annually, while all throughout the year you’ll get Amex benefits, including its Global Assist service for foreign travel and discounts at selected retailers.
It’s important to clear your balance every month, as paying the representative APR 24.5% (variable) on this card is likely to wipe out any cashback benefit.
2. American Express Platinum Cashback Card
Cashback rate: 0.75% cashback (up to £10,000); 1.25% cashback (above £10,000)
Upfront bonus: 5% bonus cashback (up to £125) in first 3 months
Representative APR: 29.8% (variable) – including an annual fee of £25
If you plan to put more than £10,000 each year on your Amex card, this one’s the best bet as you’ll get 0.75% back on everything you spend (paid into your card account annually). And if you’re looking to make a large one-off purchase, the 5% bonus rate is also unbeatable.
However, these perks come at a cost of £25 a year in fees.
Alongside this card, you’ll get the regular Amex benefits, such as Global Assist service for foreign travel and discounts at selected retailers.
It’s important to clear your balance every month however, as paying the representative APR 29.8% (variable) will probably wipe out any cashback benefit.
3. Santander All In One Credit Card
Cashback rate: 0.5% cashback, up to 15% cashback on Retailer Offers
Upfront bonus: None
Representative APR: 23.7% (variable) – including a £3 monthly fee
Every time you use the Santander All in One card, you’ll get 0.5% of the purchase value back. However, the £3 monthly fee attached to the card means you’ll need to spend £600 a month to break even.
That said, Santander’s Retailer Offers scheme (which includes the Co-op and Costa) also pays up to 15% cashback at selected retailers.
If you need it, the card offers 26 months at 0% on balances transferred to the card with no fee, as well as 0% interest on purchases for 20 months.
It’s important to clear your balance every month, as paying the representative APR 23.7% (variable) is very likely to outweigh any cashback benefit.
4. Barclaycard Rewards Credit Card
Cashback rate: 0.25% cashback on all spending
Upfront bonus: None
Representative APR: 22.9% (variable)
The Rewards card from Barclaycard offers a simple 0.25% back on everything you spend for no annual fee. There’s also no fee for using the card abroad, even if you’re withdrawing cash from an ATM (although this is still best avoided).
You won’t get an upfront welcome bonus however, and 0.25% cashback only equals 1 penny in every £4 you spend.
It’s important to clear your balance every month, as paying the representative APR 22.9% (variable) will probably wipe out any cashback benefit.
5. American Express Preferred Rewards Gold Credit Card
Rewards: 1 point for every £1 spent; 2 points for every £1 spent with airlines or in foreign currency; 3 points for every £1 spent at American Express Travel
Upfront bonus: 30,000 bonus points on spending of £3,000 in first 3 months (offer ends 9 November)
Representative APR: 59.90% (variable) – including £140 annual fee (free for first year)
This is the first rewards card in our list that is not based around cash. Instead it works on the Amex Membership Rewards® scheme.
The boosted 30,000-point windfall on initial spend of over £3,000 (offer ends 9 November) equates to £150 Amazon vouchers. Or the points can exchanged for airmiles or Nectar points.
You earn Membership Rewards® at different rates, but it’s fastest on travel-related spending. You can also use the card to access two airport lounge visits a year.
The card comes with a £140 annual fee, although it’s free for the first year.
It’s important to clear your balance every month, as paying interest and annual fees are will soon wipe out any reward benefit that comes with the card.
6. Sainsbury’s Bank Nectar Credit Card
Rewards: Up to 3 x Nectar points per £1 spent at Sainsbury’s, Argos, Habitat and Tu Clothing; 1 Nectar point for every £5 spent elsewhere
Upfront bonus: Up to 8,000 bonus Nectar points (worth £40) when you spend £400 or more at group stores in first 2 months
Representative APR: 20.9% (variable)
This card holds wide appeal in terms collecting points, as well as where you can spend them. You can collect up to 3 points per £1 spent at Sainsbury’s, Argos, Habitat or Tu clothing with this card and one Nectar point for every £5 spent outside of these stores.
It’s only available to Nectar card holders of at least six months, however.
Nectar points can be redeemed at Sainsbury’s, Vue Cinemas and Argos, or at nectar.com, although one Nectar point is only worth 0.5p.
It’s important to clear your balance every month, as paying the representative APR 20.9% (variable) will soon wipe out any rewards earned.
7. Marks & Spencer Reward Offer
Rewards: 2 M&S points for every £1 spent in-store in year one; 1 M&S point spent in-store thereafter; 1x M&S point every £5 spent elsewhere
Upfront bonus: Spend £100 in the first 90 days and earn 3,000 Rewards Points, worth £30 in M&S vouchers
Representative APR: 19.9% (variable)
This is a particularly handy card for frequent M&S shoppers. Points earned (1 point =1p) are converted into reward vouchers and sent via the mail four times a year, so long as you have more than 200 points. These can be then be redeemed in-store or online at M&S.
The card also offers 12 months at 0% on both spending and balance transfers (2.9% fee).
It’s important to clear your balance every month however, as paying the representative APR 19.9% (variable) is very likely to cost more than the rewards you can earn.
8. Amazon Platinum Credit Card
Rewards: 1.5 Amazon Reward Points (1.5p) for every £2 spent on Amazon (3 points for Prime members); 0.5 Amazon Reward Points for every £2 spent elsewhere
Upfront bonus: £40 gift card; 0% on purchases in first 3 months
Representative APR: 21.9% (variable)
If you are a regular Amazon shopper, this straightforward rewards card is one to consider. For every 1,000 points you earn, you’ll get a £10 Amazon gift card which can be redeemed at the retail giant.
The card also comes with a £40 Amazon voucher as a welcome bonus. However, it’s important to clear the balance by setting up a direct debit. This is to ensure you avoid paying interest, which would wipe out the benefit of any rewards earned.
This is especially important as the card will be automatically set as your payment method when shopping on Amazon.
What methodology did we use?
We researched the top credit cards for cashback and rewards cards. We put cashback cards at the top of the rankings, on the basis that cash is the most universal reward.
We also considered:
What level of cashback/ reward value the card pays
How and where cashback/ rewards can be earned
Annual card fees and representative APRs
We also used editorial judgment.
Bear in mind that while the details of these cards were accurate at the time of research (October 2021), deals can come and go from the market.
Whether you are accepted (and on what terms) will also vary according to your personal circumstances.
Frequently asked questions
How do reward/cashback credit cards work?
Reward credit cards work in the same way as any other credit card in that they let you buy items upfront on credit and you then pay back the amount owed in monthly instalments. Where they differ is that they enable you to earn rewards as you spend.
The type of rewards on offer will vary depending on the card you choose.
What are the different kinds of reward credit cards?
The three main types of reward credit card are those that offer airmiles, loyalty points or cashback. Here’s a little more information on how each one of them works.
Cashback credit card are one of main kind of reward cards, which is why they are often referred to as their own category.
Cashback cards enable you to earn back a percentage of the amount you spend. The amount will typically be paid into your account on a monthly or annual basis.
For example, if your card paid 2% cashback on all purchases and you bought an item for £400, you’d earn £8 back.
The more you spend on your card, the more cashback you’ll earn over time – that said, cashback rates are often capped so you’ll only be able to earn a set amount each year.
Some cashback cards offer a higher percentage of cashback in the first few months. So, for example, you might earn 5% cashback in the first three months and only 1% on any purchases made thereafter.
The cashback rate might also be tiered so that you’ll earn more cashback the more you spend. So you might earn 1% cashback on spending over £5,000, but only 0.5% on spending under that.
An airmiles credit card is most suited to those who regularly travel as it enables you to collect Avios airmiles and other frequent flyer points as you spend. British Airways and Virgin Atlantic are the two main contenders in this field.
Once you’ve built up a certain number of points, you can use these to pay for flights, hotels, holidays and days out – though note that if you use your points to pay for a flight, fees and taxes will still likely apply.
Many airmiles credit cards also offer ‘bonus’ points for spending a specified sum in the first few months of using the card, or an extra flight ticket for a friend or family member (often called a ‘companion ticket’) if you spend a certain amount over the course of a year.
If you regularly shop at a particular retailer or supermarket, look for a reward credit card that offers loyalty points at those stores. Examples include John Lewis Partnership, Sainsbury’s and M&S. As you spend in that particular shop or supermarket you’ll build up points that can then be exchanged for vouchers or other rewards to be used in the same places.
Is a rewards credit card right for you?
Using a reward credit card comes with several advantages, providing you choose one that best matches your spending habits. After all, there’s little point choosing a reward credit card that gives you points for a retailer you only occasionally shop in.
The major drawback is that many reward credit cards charge high rates of interest. Rates are often around the 23% APR mark but can be as high as 56% APR. This means if you are unable to pay off your monthly balance, the amount you pay in interest will probably far outweigh any of the rewards you receive.
For this reason, reward cards are usually best suited to those who religiously pay off their monthly balance in full. To help you remember to pay on time and avoid late payment fees, it’s a good idea to set up a monthly direct debit.
If you’re unable to pay off your balance in full each and every month, a reward card is unlikely to be right for you. That said, some reward credit cards – particularly those that offer loyalty points – offer interest-free purchases for a specified number of months, which can help you to spread the cost of your spending more cheaply.
But if you’re tempted to use one of these cards, it’s crucial to check you could afford to repay the total balance before the 0% deal ends and interest kicks in.
What should you watch out for?
If you are using a reward credit card, it’s important not to be too swayed by offers and discounts and make sure you only spend what you can afford to pay back.
With many cards offering bonuses in the first few months on the proviso you spend a certain amount, it can be easy to build up a higher balance than you intended or can afford to repay – and remember, it’s likely you’ll be charged a high rate of interest on this sum.
The other big watch-out is that some of the most competitive reward credit cards – particularly those offering airmiles or cashback – come with hefty annual fees (on top of interest on your outstanding balance).
You’ll therefore need to consider whether the benefits on offer warrant paying such a high fee and whether you could afford to keep paying it each year.
Finally, keep in mind that the most competitive credit cards will only be offered to those with an excellent credit score. If yours isn’t up to scratch, you’re more likely to be turned down for a reward credit card.
It’s a good idea to use an eligibility checker before you apply which won’t show up as a footprint on your credit report.