How to Compare Reward Credit Cards

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Reward credit cards allow you to earn rewards on your credit card spending.

By using these cards wisely - moving all your everyday spending over to them and always paying off your balance in full - reward credit cards really can earn you a little something back on your spending for free!

These cards are best for...

Anyone looking to earn rewards on their spending - with such a range of reward options available, there is sure to be something to suit everyone.

People who religiously repay their credit card balance off in full each month will most benefit from a reward credit card.

These cards are not suitable for...

- Not repaying your card balance in full
If you know you don’t repay your balance in full each month, you would be better suited to a low interest rate credit card.

The rewards you would be earning on a reward credit card will never outweigh the interest you are charged - and choosing a low interest rate credit card instead will save you more money.

- Balance transfers
Whilst many reward credit cards also offer tempting balance transfer deals, if you do need to transfer an existing credit card balance you would do better to choose a specific balance transfer credit card for the job.

It's not so much that reward credit cards don't offer a good balance transfer deal, but when used for spending to earn rewards too - these cards can create hidden interest traps.

Card issuer's will generally always only allow you to repay your cheapest card balance first, such as a promotional balance transfer, leaving any purchases you’ve made on the card to accrue interest charges until you have first repaid your transferred balance in full.

See 0% balance transfer credit cards here.

- Cash transactions
Very few credit cards are suitable for cash transactions, and getting your mitts on some cash is always best done with your debit card.

Cash transactions will not earn you any rewards and they also come with handling fees and higher interest rates.

Remember, cash transactions include more than just ATM withdrawals, they also cover getting 'cash back' at the supermarket, buying foreign currency or traveller's cheques and often gambling transactions too.

Knowing what's on offer...

As with any financial product, it's important to really understand what is on offer before you sign on the dotted line.

Reward credit cards may well offer lots of fancy glitz in the form of free rewards - but behind this shiny glitter is a credit card.

- Rewards are only free if you make sure to keep them free!
Credit cards are issued by major banks and building societies who are armed to the teeth with moneymaking know-how.

Reward credit cards really can offer free rewards - but only if you keep them free!

The way to keep your credit card rewards free is make good use of the interest free period offered by credit cards and always repays your balance in full each month.

The interest free period on a credit card is the amount of time you have to repay your statement balance in full before you will be charged any interest.

It's important to bear in mind that this interest free period usually only applies to purchases, and cash transactions or balance transfers will usually be charged interest from the day of the transaction - even if you clear your balance at the end of the month.

- Only use your reward credit card for purchases
The best way to use a reward credit card is just like you would use a debit card or a charge card.

Switch all your everyday spending from your debit card to your reward credit card and then religiously repay the balance in full each month as you would with a charge card.

Balance transfers and cash transactions will not earn you any rewards - however they will earn you additional costs instead.

If you need to transfer a balance make sure to get a separate card that offers a good balance transfer deal - see 0% balance transfer credit cards here.

If you are ever caught out without cash, or you need to buy some Euros for your winter break - try and use your debit card - or in the case of buying foreign currency - withdraw the money on your debit card from an ATM machine in the U.K. and then buy the Euros with cash.

- The true value of rewards
The true value of credit card rewards varies from one person to the next - money off a free flight to Australian is worth a lot more to Mrs. Hanson whose children emigrated last year, than to Mrs. Smith who owns a Spanish Villa.

The value of rewards is also affected by the amount of points or miles earned per pound, and the actual value of each point or mile.

Different reward credit cards will earn you varying amounts of points or miles per pound you spend on the card. It's also important to remember that 50 BA Miles might actually be worth a lot more than 200 MBNA Points.

Luckily, the days of hard research and calculating rewards are all but over - with consumer services like ChooseMoney.co.uk - who've done all the hard work for you - and even provide a nifty calculator to work it all out based on your individual spending level.

Check out our reward credit card comparison page to find out exactly how many rewards your spending will earn, and also how much they are really worth.

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Compare reward credit cards