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Credit cards with rewards
 Fly off to sunshine with airmiles
N.B. Ignore this article if you don't pay off your balance in full each month. It's not worth going for the rewards if you are paying more interest on your debt.
What are credit cards with rewards?
These are cards that will give you cashback, points or airmiles when you use them. They're not to be confused with the loyalty cards that some shops and businesses offer (like Nectar, Tesco Clubcard and the Boots card). These are actual credit cards that you use to buy things. However you get a bit back, in some form, whenever you spend with them. They're great for people who always pay back their credit card bill each month before the interest period kicks in because it means they're getting something back for their spending. However, there's no point bothering if you can't pay the debt off each month. Better to go for the card with the cheapest interest rate you can find to keep your bills down.
Latest deals
Fancy a free flight? Citibank now offers a Bmibaby credit card. Spend £100 or more on retail purchases within 90 days of your account opening date and get a free introductory return flight to any destination that bmibaby serves. This doesn’t include airport taxes and fees however, so bear that in mind when you’re thinking about the cost of the holiday. To keep you sweet, they also give you an extra return flight for every 12 months you keep the card, providing you spend £3,000 on the card in that year. There is a typical 16.9% APR (variable) and 0% on balance transfers for 12 months (3% fee). As an added bonus, if you buy something on your credit card and find it cheaper somewhere else within 60 days then they’ll refund the difference – now isn’t that nice of them?
Alternatively, the new Citibank easyJet Mastercard is offering an easyJet flight for free (up to the value of £40 including taxes) if you spend at least £250 on it in the first 90 days. You also get 10% off all easyJet bookings made in the first three months, plus airmiles. You get three miles for every £1 spent on easyJet flights, two miles for every £1 spent on overseas purchases, and one mile for every £1 spent on everything else. The miles can go towards easyJet flights or they can be taken as cashback at the end of the year. The card has a typical 16.9% APR (variable) on purchases and also has a 0% balance transfer deal for nine months.
MBNA have just released a BT reward credit card that you can use to earn money off your BT bill. The card also offers 0% AER on balance transfers for the first 12 months, although they will charge you a 3% admin fee. You also get 3 months interest free on any purchases and after that the interest is only 16.9% which is competitve. Who should use rewards cards?
Nearly two thirds of credit card holders pay off their balance in full every month (good for them). If you are one of those savvy people who don't have to pay extra each month then the interest rate on your card will be irrelevant. Now is the time to demand rewards for your spending, though. Check out our best buy list below and pick the one that will give you the most money or the best rewards.
Cashback Cards
The cashback cards we like are:
American Express Platinum MoneyBack Credit Card. This card offers 5% cashback for the first three months for spending up to £4,000 and then rates vary after that; if you spend under £3,500 you can receive 0.5% cashback, those spending between £3,501 and £10,000 will receive 1% cashback, while spending over £10,000 will gain you 1.5% cashback. Complicated, we know, but if you're going to spend over £10,000 this is the best overall rate.
Barclaycard Platinum Cashback. This card offers 0.5%, which is what most of the rest are offering, but you do get 1% cashback on supermarket and petrol spending, so if this is where the majority of your credit card money goes, then this could be the card for you.
Shell Mastercard from Citibank. This card gives you 3% cashback on Shell fuel purchases and 1% on all other purchases, plus 0% on balance transfers for nine months and a typical APR of 16.9%.
Reward Cards
The reward cards that have the most worthwhile deals are:
Lloyds TSB Airmiles Duo. This account gives you two credit cards; a Mastercard and an American express card. With the American Express card, you earn 1 airmile for every £10 you spend and one airmile for every £5 you spend with an Airmiles partner (see their website airmiles.co.uk for the list). In fact, right now they are offering a bonus 1500 airmiles if you apply through the website. However, you have to spend £50 with the Mastercard to get 1 airmile (or £25 with an Airmiles partner). So why not just use the American express card all the time? The problem is that these aren't always accepted, so you may end up spending more on your Mastercard and earning fewer airmiles.
British Airways are also running an Airmiles scheme with American Express. You get 1,000 free bonus miles when you use the credit card for the first time and then it's one mile per £1. There's no annual fee and the APR is 17.9%. You also get travel accident benefit up to £75,000 with the card.
Fancy a free flight for spending £250? The new Citibank easyJet Mastercard is offering an easyJet flight for free (up to the value of £40 including taxes) if you spend at least £250 on it in the first 90 days. You also get 10% off all easyJet bookings made in the first three months, plus airmiles. You get three miles for every £1 spent on easyJet flights, two miles for every £1 spent on overseas purchases, and one mile for every £1 spent on everything else. The miles can go towards easyJet flights or they can be taken as cashback at the end of the year. The card has a typical 16.9% APR (variable) on purchases and also has a 0% balance transfer deal for nine months.
Then there are cards that are worth it if you are a big fan of certain shops: The John Lewis and Waitrose partnership MasterCard gives you one point per £1 spent in John Lewis, Waitrose and Ocado. You also earn one point per £2 when you spend anywhere else. Every 500 points are worth £5, which you get as vouchers to spend in John Lewis, Waitrose or Ocado.
Similarly, the Marks and Spencer Money & MORE MasterCard will give you one point for every £1 spent in Marks and Spencer and one point for every £2 spent elsewhere. 100 points will get you a £1 voucher, which you can then spend in Marks and Spencer.
The Sainsbury's Bank Mastercard is a good one even for those who don't pay off their balance every month. It gives you 4 nectar points for every pound that you spend wherever you shop and you'll get 0% on Sainsbury's purchases for 12 months, purchases elsewhere for 3 months and 12 months 0% interest on balance transfers. Not too bad for Sainsbury's fans.
Getting Started
IF you know you will pay off your balance every month, and IF you have the discipline not to spend more just to get the extra points, then switch to a credit card that will reward you for spending. It's up to you whether you want:
Money back
Miles
Points
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Jasmine Birtles
Moneymagpie Moneypedia
22.08.2008
