A Full Review of the Best Rewards Cards UK
The wonderful world of UK rewards credit cards can be a confusing place at times. Making the right choice between a credit card offering 1% cashback or a 2-4-1 voucher at £10,000 of spend may seem daunting. To help our readers, we thought it was about time we provided a detailed review of the best rewards credit cards currently available in the UK.
Now one thing you should know from the outset is that not all UK rewards credit cards are made equal! There are reward credit cards which provide excellent cashback, those that are better for flying, cards which are better for hotels – the list goes on. HOWEVER there are also rewards cards you should avoid altogether…
Within this review of the best rewards cards UK, we’ll cover everything from the do’s and don’ts of spending on rewards cards, to the various types of cards available and finally help you select the most suitable card… read on to find out more.
Let's break this post down...
The Benefits of a Reward Credit Card UK
I was lucky enough to stumble upon my first rewards credit card some 10 years ago and from that point I’ve been earning a combination of airline frequent flyer miles, hotel loyalty points and cashback on nearly all of my everyday spending.
I’ve used some of the perks of the best rewards credit cards in the UK to fly First Class with British Airways from London to Sao Paulo (reviewed in full here), experienced the wonders that are the Emirates First Class suite (reviewed here) and enjoyed a completely free weekend at the luxury 5 star Waldorf Astoria Rome (reviewed here).
Whilst the benefits of the best rewards cards change over time (sadly the Hilton credit card no longer offers a free night’s stay!), the competitive nature of the UK credit card market means that credit card providers are continually offering excellent benefits to both attract new customers and retain existing cardholders.
The Different Types of Rewards Credit Cards UK
As at the end of October 2018, there were a total of 59.9 million credit cards in issuance within the UK market. With the UK population estimated to be in the region of 66 million, that’s nearly one credit card for every person in the UK!
These cards make a total of 293 million purchases each month. With this in mind, it’s no wonder that UK credit card companies have cottoned on to the fact that there is significant appetite to use credit cards for everyday spending.
Whilst this space is beginning to be touched by fin-tech disruptors, the big names still tend to be prevalent including Mastercard, Visa and American Express. With fierce competition between existing credit card providers to win and retain customers, we’ve seen the evolution of the best rewards credit cards over the last 10 years.
One method adopted by all the largest credit card companies is a rewards-based scheme to encourage customers to sign up to cards and continue to spend money. These rewards-based schemes broadly fall into two main categories:
- Cashback: These cards provide rewards by way of returning a percentage of everything you spend on the card as a tax-free ‘rebate’. As we’ll see below, the best rewards cards offer up to 5% cashback in the first 3 months and then 1% on all spend after that. Depending on your spending habits this can add up to £100s each year.
- Reward Points: Whilst the benefits for rewards points credit cards vary significantly, the general principle of each one is the same. For every £1 spent on the card, you’ll receive a certain number of reward points. These points can then be redeemed for a variety of uses as we’ll cover in more detail below.
How can providers afford to offer these benefits?
Most people correctly know that a significant proportion of credit card company profits come from the interest charged on overdraft facilities. Here at Thrifty Points we strongly recommend avoiding using credit cards to borrow money – there are significantly cheaper alternatives. So how do credit card providers make money from those of us who pay off our balances each month?
Credit card companies also charge retailers a processing fee every time you use your credit card. This is known as an interchange fee. With this fee varying from 0.3% to 3% of every transaction, it can be in the interest of a credit card provider to encourage customers to spend as much money as possible on their cards.
With up to 3% of every transaction to play with, credit card companies can be very generous with the bonuses and rewards they offer customers.
The Do’s and Don’ts
Before we jump head first into this best rewards credit cards UK review, I wanted to firstly take the time to run through a couple of do’s and don’ts when using rewards credit cards.
- Do Set up Direct Debits: UK rewards credit cards are notorious for charging high interest rates on outstanding balances. To avoid any risk of being charged extortionate rates make sure you set up a direct debit to pay off your card at the end of each month.
- Do make sure that the rewards are right for you: There’s no point signing up to the Starwood Preferred Guest credit card if you’ll never stay at a Starwood-branded hotel. Make sure the benefits suit your needs and spending habits.
- Do use the card for normal spending: Try to put all of your normal spending onto your credit card. Work expenses can also help significantly towards spending thresholds.
- Don’t use these cards to borrow money: Avoid borrowing money on rewards credit cards at all costs.
- Don’t withdraw money on these cards: Nearly all rewards credit cards will charge you a significant fee for withdrawing cash from ATMs.
- Don’t spend for the sake of earning rewards: This may sound simple but I’ve heard it numerous times – I’ve just got to hit my 3 month £2,000 spend requirement so let’s treat ourselves to a nice, expensive lunch. If you weren’t planning on treating yourself to an expensive lunch then this will likely wipe out the value of the benefit. Avoid spending for the sake of it!
Best Travel Rewards Credit Cards UK for Air Miles
Frequent-flyer credit cards receive a significant amount of attention here at Thrifty Points and so they should! These credit cards offer some of the most generous credit cards rewards currently available in the UK market.
Something that I haven’t mentioned as yet within this best rewards credit card review is that some rewards credit cards come with an annual fee. In certain instances these fees can be significant – very significant!!
Whilst the benefits of these cards can outweigh the annual fee (I’ll touch upon this in more detail later), I’ll provide examples of both a free credit card and premium credit card to help you decide which may be best suited to your spending habits…
Best Free Frequent-Flyer Credit Cards
The Amex Gold Card is currently one of the most generous free credit cards available to UK residents. The card provides its rewards by way of American Express Membership Rewards points which can be transferred to 14 airline frequent-flyer programmes (including the likes of British Airways and Virgin at a rate of 1 reward point to every 1 frequent-flyer mile).
Whilst the card is free for the first year, from the 2nd year there is a fee of £140 each year. Most people would be better off cancelling the card rather than paying this fee.
Sign-Up Bonus: The card provides an strong sign-up bonus of 10,000 points when you spend £3,000 in the first 3 months. This bonus can be increased to 12,000 points by using this link.
Ongoing Benefits: You will earn 1 reward point for every £1 spent on the card. This is in line with market norms.
Other Benefits: You’ll receive two free airport lounge passes when you sign up to the card.
Thrifty Points Conclusion: With a market-leading sign-up bonus and strong, continued earnings rate, the Amex Gold Card wins the award for the Best Rewards Credit Card for frequent flyers.
Probably one of the most widely known frequent-flyer credit cards is the BA Amex credit card. Whilst the card is completely free, we’ve included this credit card as a comparison rather than a suggestion because, as you’ll see, the benefits of the Gold Card are head and shoulders above this card.
Sign-Up Bonus: When you spend £1,000 on the card in the first 3 months you’ll receive a bonus of 5,000 Avios points. This bonus can be increased to 6,000 points by using this link and scrolling down to the free version of the card.
Ongoing Benefits: You will earn 1 Avios point for every £1 spent on the card. Note that these have to be redeemed as Avios, which provides less flexibility than the Gold Card.
Other Benefits: Should you spend £20,000 on the credit card in a year, you’ll receive a 2-4-1 reward flight redemption voucher. Whilst the benefit of this voucher can be significant, you’d be far better off choosing the Premium BA card as I explain in detail within my full review here.
Thrifty Points Conclusion: With an uninspiring sign-up bonus and an ongoing rewards benefit which has to be redeemed as Avios, we believe that there are alternative cards on the market that offer significantly better value for customers. Whilst the 2-4-1 voucher is attractive you’d need to spend £10,000 more than the premium version of the card and it also expires after 1 year compared with the 2 years of the premium card.
Best Premium Frequent-Flyer Credit Cards
Whilst this card comes with a £195 annual fee, in certain instances the benefits of this card can be worth a great deal more. In fact they can be worth as much as £2,000 as we’ll see below.
Sign-Up Bonus: The card provides a strong sign-up bonus of 25,000 points when you spend £3,000 in the first 3 months. This bonus can be increased to 26,000 points by using this link and scrolling down to the correct card.
Ongoing Benefits: You will earn 1.5 reward points for every £1 spent on the card. This is one of the most generous offers in the market.
Other Benefits: The greatest benefit of this card is the 2-4-1 reward flight redemption voucher when you spend £10,000 in a year. Why’s this so much better than the 2-4-1 voucher which comes with the free version?
Well! Let’s assume you’d like to use the 2-4-1 voucher for a flight during peak times on a business class trip from London to say Santiago in Chile. With limited availability on this flight you’d need to consider booking 355 days in advance if you wanted to secure 2 business class seats. If the voucher with the free card runs out in a year, this leaves little, if any, time to book your flight. Worth considering!
The same return flight would normally require a total of 420,000 Avios during peak times. You can reduce this by half with the 2-4-1 voucher, saving a heady 210,000 Avios points. I tend to value Avios points in the region of 1p (read my full value of an Avios point article here) and as such this saving could be worth nearly £2,100!
Thrifty Points Conclusion: With a 2-4-1 voucher which could be worth as much as £2,000 and a further sign-up bonus of 26,000 Avios points, the BA Premium Plus Card could actually offer great value for money. As such this is our favourite luxury travel rewards credit card.
Clearly, if you wouldn’t spend £10,000 on the card or alternatively wouldn’t redeem the 2-4-1 voucher for a flight over say 40,000 Avios points then the value of this card is likely to be limited…
If you thought the fee for the previous card was expensive, then you may be shocked to hear that the Amex Platinum Card comes with an eye-watering annual fee of £575 pa. HOWEVER, similarly to the other card, for certain people the benefits of the card can far outweigh the costs…
Sign-Up Bonus: The card provides an exceptional sign-up bonus of 30,000 points when you spend £2,000 in the first 3 months. This bonus can be increased to 35,000 points by using this link and scrolling down to the correct card.
Ongoing Benefits: You will earn 1 reward point for every £1 spent on the card.
Other Benefits: The other benefits are extensive with this card and include:
- Unlimited free airport lounge access
- Free international family travel insurance
- Gold status with Hilton / Radisson / Starwood / Melia / Hertz / Avis
- Jade status with Shangri-la
- Free Eurostar lounge access
- Lounge access with Delta airlines
Thrifty Points Conclusion: Whilst I’m adverse to spending money (I run a website with Thrifty in the name!!), I’ve recently forked out the £575 pa to sign up to the Platinum Card. As someone who travels a fair amount, the free travel insurance and airport lounge access provide enough value to justify the cost. The rest is a bonus!
Best Rewards Credit Card UK for Cashback
For those of you who may not use their points to travel, another alternative option would be a Cashback credit card. These can also be combined with cashback websites such as TopCashback when shopping online to increase your rewards further (you can earn £7.50 by signing up through this link). Two of the best rewards credit cards for offering cashback are the free Everyday Platinum Cashback American Express and £25-a-year premium version of the card. Let’s take a look at each of these cards below:
Free Everyday Platinum Cashback American Express
Sign-Up Bonus: Using this link and scrolling down to the Platinum Cashback Everyday card you can benefit from £10 cashback when you spend just £1 on the card. Ordinarily there is no sign-up bonus.
Ongoing Benefits: There is an enhanced bonus of 5% for the first 3 months (capped at £100 cashback). You will then earn 0.5% cashback on all spend up to £5,000 and 1% on all spend over £5,000.
Other Benefits: No other benefits.
Thrifty Points Conclusion: This is a good entry-level cashback card. Most people however will be better off with the premium version of the card (even with the £25 pa fee!).
Sign-Up Bonus: Using this link and scrolling down to the Platinum Cashback credit card you can benefit from £25 cashback when you spend just £1 on the card. This will offset the first year’s cost of £25 for the card!
Ongoing Benefits: There is an enhanced bonus of 5% for the first 3 months (capped at £125 cashback). You will then earn 1.0% cashback on all spend up to £10,000 and 1.25% on all spend over £10,000.
Other Benefits: No other benefits.
Thrifty Points Conclusion: As we’ve seen, the referral bonus of £25 almost offsets the first year’s annual cost. With a bonus of £10 on the other card, you’d initially be £10 worse off upon signing up. With a higher cashback rate of 1% compared to 0.5% you’d need to spend £3,000 on the card to be in a break even position.
As such for those who expect to spend less than £3,000 a year on a credit card then the free version of the card is likely to provide best value, with the premium version providing a larger overall benefit to those who will spend more than £3,000 a year.
Best Credit Card Rewards UK for Hotels
I’ve recently written articles covering the various options to earn loyalty points with the likes of IHG (full review here), Marriott (full review here) and Accor (full review here). There was a clear winner for the best hotel travel rewards credit card UK. Drum roll please…
Sign-Up Bonus: A sign-up bonus of 30,000 SPG points is available when you spend £1,000 in the first 3 months. This can be increased to 33,000 points if you use this link.
Ongoing Benefits: You’ll receive 3 SPG points for every £1 spent the card. We value an SPG at roughly 0.5p, so this ongoing benefit would be better than the approximate 1p per £1 spent on the Gold.
Other Benefits: You’ll receive SPG Gold elite status when you spend £15,000 in a year. This offers guaranteed 4pm checkout and a possible room upgrade (subject to availability).
Thrifty Points Conclusion: Whilst the SPG Amex is our best hotel branded rewards credit card, I’d highlight that it offers a very similar sign-up bonus to the American Express Gold Card when adjusted for the annual and a marginally better earnings rate. With the increased flexibility of rewards points (which can be converted to SPG points) offered with the Amex Gold Card and no charge for the first year, we’d nearly always recommend the free Gold over the SPG Amex.
FAQs – Best Rewards Cards
What’s the best free reward card for a newbie?
As I’ve alluded to throughout this review, one of the Best Rewards Credit Cards for UK citizens is the American Express Gold Card. With an good sign-up bonus, good continued earnings rate, 2 free airport lounge passes and no annual fee for the first year, we would recommend this card for most. You will just need to work out whether you should cancel the card at the end of the first year – I personally would…
What protection is there on reward credit cards?
Another great positive about using a rewards credit card is that you have far greater consumer protection than an ordinary debit card. As a result of the Consumer Credit Act 1974, if you purchase anything on the card between £100 and £30,000 and something goes wrong, the card issuer is equally as liable.
How many reward credit cards can I have?
Whilst there’s no limit to the number of rewards credit cards you can hold, we’d recommend against signing up for too many. Not only could it damage your credit rating but it could also limit your ability to receive the free sign-up bonuses as well. Recent changes to American Express rules now mean that to qualify for the sign up bonus you cannot have held a personal American Express credit card in the last 24 months. There are however 3 exceptions which can be combined for a maximum of 83,000 points – learn more about the sign up bonus restrictions and our suggested strategy here.
Let’s Wrap this Up
It’s no surprise that the majority of cards featured above are offered by American Express. It’s no secret that American Express charged retailers the highest interchange fees and as such is able to pass this benefit on to its customers as rewards.
The Best Rewards Credit Card UK is likely to vary depending on both your spending habits and the way that you’d plan on using the rewards.
The free Everyday Cashback credit card provides good flexibility for those who are likely to spend less than £3,000 in a year – sign up here to receive a £10 credit.
Similarly, the American Express Gold Card provides a strong sign-up bonus and a reasonable ongoing spend. American Express Rewards points can in a worst case scenario be converted to Amazon vouchers at 0.5p per point. As such the sign-up bonus could be worth £55 in vouchers should you rather redeem in this way – although it could be worth significantly more if redeemed for hotel stays or flights. Benefit from an enhanced sign up bonus of 12,000 here.
Enjoy what you’ve read? Join our mailing list to receive our best articles on luxury worldwide travel and points earning opportunities. No charge. No Spam. Only Inspiration.