New research from Which? shows that you could be losing out on hundreds of pounds by choosing the wrong reward credit card.
Reward credit cards are one of the few products on the market where you can earn a reasonable return for staying loyal to a particular brand.
Our research shows, however, that this loyalty could be a false economy, leaving you up to £140 less well off in rewards between the most and least generous deals on the market.
Reward and cashback cards: the best and worst deals
The American Express Nectar credit card came out top in our research, offering a generous £50 introductory bonus, 2% in-store rate and additional £2.50 worth of MorePoints for every £500 spent.
The next best reward credit cards on offer were from House of Fraser and Amazon.co.uk. House of Fraser’s Recognition MasterCard offers a 3% in-store rate and 1% elsewhere, while the Amazon.co.uk offers a 3% on all spend for the first 90 days followed by 2% on Amazon.co.uk spend and 1% elsewhere.
The Tesco Clubcard MasterCard came out worst in our scenario offering only 0.25% on all spend, though it does pay 1.25% on Tesco Fuel.
Reward and cashback cards: what you get for £500 spend a month
The table below shows how much you would receive in reward points as a cash equivalent during your first and subsequent years, based on spending £250 in-store (i.e. with the brand) and £250 elsewhere. For a full break down of the reward point structure and introductory deals see our reward card credit card table.
|Reward credit cards|
|Purchase APR||Annual Fee||First-year reward for £500 monthly spend||Subsequent year reward for £500 monthly spend|
|American Express Nectar Credit Card||19.9%||None||£155||£105|
|House of Fraser Recognition MasterCard||19.9%||None||£120||£120|
|Laura Ashley MasterCard||18.9%||None||£80||£75|
|MBNA More Rewards Amexa||12.9%||None||£75||£60|
|NatWest/RBS YourPoints MasterCard||17.9%||None||£65||£42.5|
|Barclaycard Freedom Visa||18.9%||None||£64.5||£34.5|
|Sainsbury’s Bank Nectar MasterCard||17.9%||None||£55.5||£33|
|Marks and Spencers Bank MasterCard||16.9%||None||£50||£45|
|AA Members Reward Visa||16.9%||None||£45||£45|
|John Lewis Partnership MasterCard||16.9%||None||£45||£45|
|AA Rewards Visa||16.9%||None||£22.5||£22.5|
|Tesco Clubcard MasterCard||16.9%||None||£15||£15|
|Cashback credit cards|
|American Express Platinum Cashback Card||14%||£25||£106.25||£50|
|Barclaycard Cashback Visa||19.9%||£24||£81||£66|
|Santander 123 Casback MasterCard||18.9%||£24||£0 – £66||£0 – £66|
- Comes with a Visa card, earning half the points of the Amex card.
The best cashback cards
Cashback credit cards offer the best all-round solution, repaying a set amount on all spend regardless of where you choose to shop. However as shown above, the best reward card deal can earn you more than the best cashback card on £500 spend a month.
American Express once again came out best in scenario with the Platinum Cashback Credit Card. It pays a generous 5% introductory cashback rate capped at £100 during the first three months and 1.25% on all other spend.
Barclaycard and Santander offered the next best deals, for more information visit best cashback credit card deals.
How to make the most of reward and cashback cards
To make the most of a reward or cashback credit card, you need to ensure you pay off your bill in full each month, to avoid paying any interest.
The best cashback credit card deals shown above charge an annual fee of £24/£25, so these cards may not be suitable for small spenders as the fee may cancel out the annual rewards.
For more information about credit cards see our guide how to find the best credit card.
- Credit cards – a round-up of the best credit cards on the market
- Can I claim on my credit card if something goes wrong? – get help from our consumer rights guide
- Which? Consumer Rights – We help with any problem and guidance on key consumer regulations