Best reward and cashback credit cards revealedFind out which cards reward best for brand loyalty

01 April 2013

Credit card

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 House of Fraser's Recognition MasterCard offers a 3% in-store rate and 1% elsewhere, while the offers a 3% on all spend for the first 90 days followed by 2% on 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 APRAnnual FeeFirst-year reward for £500 monthly spendSubsequent year reward for £500 monthly spend
American Express Nectar Credit Card19.9%None£155£105
House of Fraser Recognition MasterCard19.9%None£120£120 MasterCard16.9%None£117.5£90
Debenhams MasterCard19.9%None£110£105 Visa16.9%None£105£90 MasterCard18.9%None£105£90
Laura Ashley MasterCard18.9%None£80£75
MBNA More Rewards Amexa12.9%None£75£60
NatWest/RBS YourPoints MasterCard17.9%None£65£42.5
Barclaycard Freedom Visa18.9%None£64.5£34.5
Orange MasterCard18.9%None£60£60
Sainsbury's Bank Nectar MasterCard17.9%None£55.5£33
Marks and Spencers Bank MasterCard16.9%None£50£45
AA Members Reward Visa16.9%None£45£45
John Lewis Partnership MasterCard16.9%None£45£45
AA Rewards Visa16.9%None£22.5£22.5
Tesco Clubcard MasterCard16.9%None£15£15
Cashback credit cards
American Express Platinum Cashback Card14%£25£106.25£50
Barclaycard Cashback Visa19.9%£24£81£66
Santander 123 Casback MasterCard18.9%£24£0 - £66£0 - £66

Table notes

  1. 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.

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