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Can a reward credit card help you beat rising costs?
We’re all spending more than we used to on groceries and other essentials, but used wisely a reward credit card could offer a way to earn some of that money back.
Reward credit cards will pay you a small percentage of what you spend, either in cashback or in the form of points which can be coverted into vouchers. By using this type of credit card for your everyday spending, as you would a debit card - and clearing your balance each month - you will gradually rack up the rewards.
Which? has crunched the numbers and found that those spending £100 a week with some of the top deals could earn between £16 and £95 back in rewards in a year.
Here, we compare some of the best reward cards on the market and reveal tips and tricks to help you make the most of the deals.
How much could you earn with a reward credit card?
It can be very difficult to compare these deals, largely because there are so many variables, such as introductory bonus offers, annual fees and the fact that points have different values between retailers.
To help we've analysed the top 11 cards on the market to work out how much you would earn if you spent £100 a week over the course of a year at a participating retailer (if specified). We then converted the rewards into monetary value to see how much you could earn.
We’ve split the tables into cashback and reward points and ordered the cards alphabetically.
Cashback
| Credit card | Cashback rate per £1 | Annual fee | Yearly gain on £100 weekly spend | Yearly gain on £100 weekly spend (including introductory offers) | Representative APR |
|---|---|---|---|---|---|
| American Express Platinum Cashback credit card | 0.75% a | £0 b | £39 | £94.25 | 35% |
| American Express Platinum Everyday Cashback credit card | 0.5% c | £0 | £26 | £84.50 | 29.4% |
| Co-op Members cashback credit card | 0.5% at Co-op, 0.3% elsewhere | £0 | £26 | £26 | 18.2% |
| Lloyds Cashback credit card | 0.25% d | £0 | £16 | £16 | 22.9% |
| Santander All In One credit card | 0.5% | £36 | £26 | £26 | 27.7% |
Table notes: All figures correct 24/5/2023. (a) 5% cashback for the first three months, capped at £125, after the first three months, you get 0.75% cashback on all purchases up to £10,000, then 1.25% cashback on spending over £10,000 in a year. (b) £25 after the first year. (c) 5% cashback for the first three months, capped at £100, after the first three months, you get 0.5% cashback on all purchases up to £10,000, then 1% on spending over £10,000 a year. (d) 0.25% up to £4,000, 0.5% over £4,001 each year.
The best cashback credit card with no annual fee is the Platinum Cashback Everyday credit card from American Express - a Which? Recommended Provider.
Spending £100 a week can earn you £84.50, and you’re not restricted to a certain retailer. A big chunk of this is down to the 5% introductory cashback rate you get for the first three months, which drops to 0.5% afterwards. This means you’ll only earn £26 in your second year.
The American Express Platinum Cashback credit card can earn you more in your first year at £94.25, but in the second year that drops to £39 and after the £25 annual fee is factored in it's a lot less rewarding compared to the Everyday fee-free deal.
Reward points
| Credit card | How many points you earn at participating retailer | How many points earnt spending elsewhere | Annual fee | Yearly gain on £100 weekly spend | Yearly gain on £100 weekly spend (including introductory offers) | Representative APR |
|---|---|---|---|---|---|---|
| American Express Nectar credit card | 3 points per £1a | 2 points per £1 | £0 b | £77.50 | £77.50 | 35% |
| Asda Money credit card | 1% c | 0.3% | £0 | £52 | £72 | 25.9% |
| John Lewis Partnership credit card | 5 points per £4 d | 1 point per £4 | £0 | £65 | £95 | 27.9% |
| M&S Shopping Plus credit card | 1 point per £1 | 1 point per £5 | £0 | £52 | £52 | 23.9% |
| Sainsbury's Bank Nectar credit card | 1.5 points per £1 e | 1 point per £5 | £0 | £37.50 | £77.50 | 22.9% |
| Tesco Bank All Round credit card | 5 points per £4 | 1 point per £8 | £0 | £65 | £65 | 22.9% |
Table notes: All figures correct: 24/05/2023 (a) 20,000 Nectar points when you spend £2,000 in your first three months offer is not factored into this analysis as we are only spending £100 a week (b) £25 annual fee after the first year (c) £20 bonus if you apply for the card by 4 July 2023, set up a Direct Debit and spend £50 in the first 60 days (d) triple points offer in first three months with participating retailers (e) 8,000 Nectar points if you spend £400 at Sainsbury’s, Argos, Habitat and Tu Clothing during the first two months.
Nectar points
You can consistently earn the most with the American Express Nectar credit card.
Spending £100 a week with a Nectar partner (such as Sainsbury’s) would earn £77.50 with no fees to pay in the first year. After that, there’s a £25 annual fee.
You earn a minimum of three points for every £1 spent with Nectar partners, and two points for £1 spent elsewhere.
At Sainsbury’s, 500 Nectar points are worth £2.50, so if you spent £100 a week for a year, you’d have 15,600 points after a year, which would be worth £77.50.
Our anlaysis doesn't factor in the 20,000 Nectar point offer which is available if you spend £2,000 in your first three months, as it didn't fit into our £100 weekly spend scenario. But if your spending could hit that target the card would be even more rewarding.
This is much more generous than the Sainsbury’s Bank Nectar credit card, where you only earn three points for every £2 spent at Nectar Partners, and one point per £1 spent elsewhere.
However, there’s no annual fee and you can get 8,000 Nectar points if you spend £400 at Sainsbury’s, Argos, Habitat and Tu Clothing during the first two months.
This would boost your rewards to £77.50 if you then spent £100 a week for the rest of the year. Outside the bonus period, spending £100 a week would earn £37.50.
- Find out more:Sainsbury's Bank Nectar credit card point shake up
Tesco Clubcard points
The Tesco Bank All Round credit card lets you earn five Clubcard points for every £4 spent at Tesco, and it includes fuel (not Esso, though). Tesco Bank is also a Which? Recommended Provider.
That said, if you’re thinking of getting this card for its points-earning potential alone, you could stick to your Tesco Clubcard.
On a £100 weekly shop, you could earn £52 worth of points in a year (one point per £1 on Tesco groceries). That’s only £13 less than by using the Tesco credit card.
- Find out more:Tesco Clubcard point shake up
John Lewis/Waitrose points
You'd earn £65 over the course of the year with the John Lewis Partnership card, which has no annual fee.
New customers with a John Lewis Partnership card, which is run in conjunction with New Day, can boost this to £95, thanks to the triple points offer at aprticipating retailers in the first three months.
The card allows you to earn five points for every £4 spent at John Lewis or Waitrose and every 500 points is worth a £5 voucher. It’s also one of the few cards on the market where you can also get points when you purchase travel money.
However, there were problems when this card relaunched last year. We heard from existing customers whose credit limits had been slashed; others experienced issues using their new cards on certain websites, and some were rejected altogether.
- Find out more:John Lewis Partnership credit card relaunch
Are reward credit cards a good deal?
The answer to this really depends on your shopping habits. If you tend to stick to one supermarket, then putting the weekly shop on its reward credit card could see you earn back money quite effortlessly.
If you prefer to mix up where you shop, a cashback credit card could be a better option. While you might not earn a significant amount each time you spend, rewards can add up over time.
- Find out more:best cashback and reward credit cards
How to boost your rewards
There's a few ways you can maximise your rewards with these cards.
Some reward credit cards offer big bonuses for joining, but check what the terms are, as you may need to spend a certain amount within the first two or three months of having the card.
Credit cards offering more generous rewards tend to have an annual fee. For example, for £25 a year you can get the American Express Platinum Cashback credit card, which pays a higher rate of 0.75% of cashback after the introductory period.
You may be able to earn even more by paying for an additional loyalty subscription, but it's only worth it if you take full advantage of the rewards.
For example, the M&S Shopping Plus credit card, for instance, pays one point for every £1 spent in-store and online. But, if you add on M&S Club Rewards for £10 a month, you’ll earn two extra reward points for every £1 spent at M&S, plus £65 M&S Vouchers, free next-day delivery, and 32 M&S Café hot drinks vouchers.
3 things to know before getting a reward credit card
There are a few things worth taking into consideration before you sign up.
1. They're not the best for borrowing
Reward credit cards typically offer very high rates so they are not the best cards to borrow with.
You should aim to pay what you spend off in full at the end of every month, otherwise the interest charged could wipe out the benefit of what you make in rewards.
A different type of credit card, such as one that offers 0% interest might suit you better if you need to spread the cost of a big purchase.
- Find out more: best 0% interest credit cards
2. Secondary cardholder purchases could be risky
All credit cards offer Section 75 protection, so if you make a purchase of more than £100 but less than £30,000, then the lender is equally liable as the retailer if something does go wrong.
That being said, watch out for Section 75 protection traps - for example purchases by the secondary card holders are not protected, so it’s worth the primary holder making any big purchases.
- Find out more: Section 75 - your rights explained
3. Not all retailers accept Amex
Some retailers won’t accept American Express credit cards, which could impact your point-earning potential.
The good news is the major supermarkets do, including Aldi, Asda, Co-op, Lidl, M&S, Morrisons, Sainsbury’s, Tesco and Waitrose.
- Find out more: is Amex a good provider?
