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Which type of reward credit card is right for you has quite a variable answer; as people have such varying likes and dislikes and varying lifestyles - to try and classify certain types of credit card users to certain types of reward credit card would either be unproductively difficult - or have a particularly useless result.
Which type of reward is right for you really depends on your personal preferences and lifestyle choices. There are reward credit cards for almost every niche, from BMW owners to book lovers.
Generally, the rule is simply to look for a reward credit card that will reward you for doing something that you're already doing - for example, if you shop at Sainsbury's, then a Nectar Credit Card will give you rewards for just doing your normal shopping.
Don't try to change your behaviour to suit a reward scheme, because after the initial few months you will find it hard to sustain.
Stuff for free!
Reward schemes genuinely do offer you the chance to get benefits from credit card companies for free, but only if you clear your balance in full each month.
Like cash back credit cards, if you use your credit card for all your regular monthly spending instead of your debit card, and then use the cash still sitting in your bank at the month end to repay your credit card balance, then a reward credit card will offer you a great deal.
If you don't clear your balance in full each month, then the interest you pay will outweigh any financial benefit from the rewards. You will be better off with a low interest rate credit card, or even an initially cheaper 0% purchase credit card. Of course, some these also offer rewards as well so shop around, but this shouldn't be your main consideration.
If you already have balances outstanding on your credit card or cards, then it might be worth considering opting for a 0% balance transfer a low-rate 'life of balance' balance transfer to clear up your debts before taking out more credit to earn rewards.
Choose a card to suit your lifestyle
Whatever you're into, there is probably a card to reward you. Below are some suggestions to suit particular interests:
For the free spirited or ever evolving...
The most straightforward offer is the cash back credit card - it's unrestrictive in the rewards offered as it's basically simple cash you can spend on anything you like, there are also rarely any limitations on which purchases or which shops you can earn cash back with.
Most cash back deals on the market now run at anything between 1% - 5% cashback, though the higher percentages are usually for limited periods or tightly defined purchases. The Egg credit card even offers 20% cash back! - though only at selected retailers.
If cash back is what you're after click through to compare cash back credit cards.
If you are more into earning good karma or giving something back, one of the good causes credit cards may be better for you. Click through for advice and to compare charity credit cards.
Football
MBNA have a good range of cards branded with premier league teams. As well as a donation to your club, most of these reward you with MBNA points. Some, like Chelsea and Tottenham also throw in a free team shirt. MBNA points can be exchanged for team merchandise, travel, entertainment or even swapped for cash.
Cars
If you drive, then you’ll need petrol. The Citi Shell credit card offers 3% discount on all fuel purchases at shell garages through a rebate scheme. But don't take one out if you generally use BP!
Egg credit card offers a 2% cash back scheme with Shell, but also offers a number of cash back and discount offers with other retailers too.
The GM card allows you to earn reward points that gives you a discount on a new Vauxhall or Saab car - up to £2,500, with the earning payouts making it one of the best reward cards on the market. If you're planning a new car in the next year or two, and you're looking at one of these marques, then this would be a good card to go for.
For petrol heads, there's the BMW card that enters you into monthly prize draws to win BMW goodies like a BMW racing day or a weekend with a six-series. There is also an alternative Mini version.
Entertainment
If you like gadgets, the Sonycard will give you points to redeem against Sony products. If books are more your thing, then go for the Amazon credit card that will let you earn points towards Amazon vouchers.
Travel
If you enjoy jetting off to foreign climes, then there are lots of cards that will give you airmiles or other travel discounts. In points terms, they generally tend to all have their own schemes, such as airmiles, BA miles or Flying Club miles. They are all basically the same thing, but each card issuer has a range of airlines that their points can be used on. You need to pick and choose which suits you best - if you like visiting America, don't choose a card with cheap European carriers as their partners.
Some cards, for example the Virgin Atlantic Credit Card also offer things like flight upgrades to cardholders or discounts on airport parking. The MBNA Travel Amercian Express Card offers things like free annual travel insurance, access to VIP airport lounges and a free concierge service, amongst other rewards.
Summary
There are many, many different reward credit cards on the market, with more coming out all the time. This guide has only scratched the surface of what's available, but you should now be better equipped to form your own judgements.
The best way to enjoy rewards is to go for a card that pays you for doing what you already do. Make sure you clear the balance in full each month to really benefit from that nice warm feeling of knowing you're getting stuff free.
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