We have analyzed the rewards credit cards available in the UK across welcome bonuses, annual bonuses, long-term rewards rates on your spending and other features like air upgrades, companion vouchers, free hotel stays and no foreign transaction fees. Regardless of the features attractive to you, many of these cards can deliver hundreds of pounds in overall annual benefits to the average UK household.
Not all credit card providers have been considered, therefore you should carry out your own research before taking out a credit card.
- Rewards Credit Cards
- Summary of Rewards Credit Cards
- Average Rewards
- How to Choose a Rewards Card for You
We focused on credit cards with rewards for general spending. Our analysis accounts for bonuses (welcome and annual) as well as spending rewards.
Cashback Rewards Credit Card: Platinum Cashback by American Express
The Platinum Cashback Credit Card by American Express pays simple cashback that automatically appears on your credit card statement once a year, reducing your balance and the amount you owe that month. Currently the card is offering a welcome rate of 5% cashback in your first three months (capped at spend of £2,500 for £125 in rewards). Ongoing rewards rates are: 1% up to £10,000 of spend and 1.25% beyond that. Overall rewards are not capped. The average UK cardholder can expect to earn around £535 of rewards in the first two years using the Platinum Cashback card.
- 1% cashback rate on purchases up to £10,000 per year
- 1.25% cashback rate on purchases over £10,001 per year
- 5% intro cashback rate up to £125 reward
- Amex not accepted everywhere
- Annual fee of £25
- 22.9% purchase APR (variable)
- Eligibility checker
Dining Rewards Credit Card: Costco TrueEarnings
The Costco TrueEarnings Credit Card offers rewards on general spending, with bonus categories of travel spend and restaurant dining. While this dining category is popular in other countries, like American and Singapore, rewards on dining are virtually non-existent in the UK. The cashback rewards rates on the Costco card are: 3% on dining, 2% cashback on travel bookings and 1% elsewhere (including at Costco).
Costco “cashback” rewards are distributed in the form of a paper Costco that is sent out once a year. Depending upon your shopping habits and your proximity to a Costco store, this rewards delivery system may be a pro or a con for you. The average UK cardholder can expect to earn a value of £450 over the first two years.
- Earn 3% on dining, 2% on travel and 1% elsewhere
- Rewards paid as Costco vouchers
- Requires Costco membership (and photo on file at Costco)
- No annual fee
- Amex not accepted everywhere
- 19.9% purchase APR
- Eligibility checker
Groceries Rewards Credit Card: Nectar Credit Card
The Nectar Credit Card rewards cardholders with a 1% effective rewards rate on their spending (0.5% at warehouse stores). The Nectar Credit Card can act (kind of) like a grocery rewards credit card because your Nectar points can be redeemed at Sainsbury’s. Nectar points can also be redeemed at other Nectar partners.
Since the rewards are a flat 2 Nectar points per £1 of spending everywhere except at warehouse retailers, cardholders have the flexibility to earn the same at Tesco, Sainsbury's, Waitrose, Asda, Aldi, Morrison's, etc. While you are not limited in how you earn points, you can only redeem points at one grocery chain (Sainsbury's) or other Nectar partners.
The first year with the card, the welcome bonus of 20,000 Nectar points (earned when you spend £2,000 in the first three months) is worth £100, more than the average grocery card welcome bonus. Cardholders can expect to earn Nectar points worth over £500 in their first two years with the card, assuming an average UK household spending level.
- Earn 2 Nectar points for almost every £1 spent (£1 minimum). These points are in addition to Nectar points you earn through the Nectar loyalty program when shopping at Nectar partners
- Earn 1 Nectar point for every £1 spent at warehouse retailers
- Welcome offer of 20,000 Nectar points when you spend £2,000 in the first three months
- Access to Global Assist for help when you travel abroad
- Purchase Protection will repair or replace any damaged or stolen items within 90 days of purchase
- £25 annual fee (waived first year)
- Eligibility Checker
Grocery Rewards Credit Card: Asda Cashback Plus Credit Card
The Asda Cashback Plus Credit Card earns 2% cashback on Asda purchases (including Asda, Asda Petrol, Living stores, and George.com) and 1% elsewhere. Rewards accumulate monthly in your account and you can either use them as they come or let them grow, up to a year. Clearly this card is targeted at Asda shoppers, since rewards are distributed as Asda vouchers. Be aware that this card carries a £3 monthly fee, which is added to your credit card bill every month. Used for all spending, this card can return a value of £450 over the first two years.
- 2% rewards rate at Asda, 1% elsewhere
- Higher-than-average cashback rate of 2% for in-store grocery spending
- 0% interest for 6 months on George.com purchases of at least £200
- No fees when buying foreign currency from Asda Travel Money
- Monthly fee of £3
- 19.9% variable purchase APR (23.9% or 29.9%)
- Eligibility checker
Travel Rewards Credit Cards (Air and Purchases): Lloyds Avios Rewards
The Lloyds Avios Rewards Credit Card is both a travel card (for making purchases while travelling) and a rewards card. This card charges no foreign transaction fees on purchases made abroad and gives the ability to earn travel-based rewards (i.e., Avios points) on your spending.
Be aware that cash withdrawals from ATMs will incur a 3% (£3 minimum) fee. You can learn more about travel cards in our No-Transaction-Fees Credit Cards article.
The Lloyds card returns 1.25% rewards rates on all spend (assuming a value of 1p/Avios) and the ability to earn a free upgrade each year. This feature allows upgrades from either Premium to Premium Economy or Premium Economy to Business, the latter generally being the more valuable use of the reward, potentially creating hundreds of pounds worth of value each year.
- Earn 1.25 Avios for every £1 spent on the American Express card
- Earn 1.25 Avios for every £5 spent on the MasterCard
- Collect double Avios in the first 6 months on the American Express, up to £2,500 of spend per month
- No foreign transaction fees
- Flight upgrade voucher when you spend £7,000 a year, which can only be used on a booking paid for in full with Avios
- 24-month interest-free period on purchases
- 1.25 Avios per £5 of balance transfer
- 0% interest for 24 months on balance transfers (3% fee applies), for transfers made in the first 90 days
- Annual fee of £24
- 23.7% APR (or 26.6% or 31.1%, variable)
Air Rewards Card: Virgin Black
Note: The Virgin Black and White credit cards are not currently open to new applications.
The Virgin Black rewards cardholders with Flying Club miles for spending and the chance to earn Premium Economy upgrades and a Companion Voucher every year. Ongoing rewards rates are around 2.5% on everyday spending and 5% on Virgin Atlantic and holiday spend, depending of course on how you redeem miles.
It is important to note the Companion Voucher is earned after you've spent £7,500 AND then buy a full fare qualifying flight. (A full fare qualifying flight are those tickets purchased in booking classes: Y,B,R,L,U,M,E,Q,X,W,S,H and J.) You'll have to fly Virgin a second time (paying for that ticket at a qualifying adult fare) in order to use the voucher. Vouchers are valid for twelve months. All of these perks can add up to around £2,000 in value over the first two years, so long as your flying habits are a good match to the terms and restrictions of the card, enabling you to use the rewards.
- On the Amex card, earn 2 Flying Club Miles for every £1 spent on general purchases and 4 Flying Club Miles for every £1 spent at Virgin Atlantic or Virgin Holidays
- On the Visa, earn 1 Flying Club Miles for every £1 spent on general purchases and 2 Flying Club Miles for every £1 spent at Virgin Atlantic or Virgin Holidays
- Receive a Premium Economy upgrade on an economy redemption when you spend £5,000 on the Black Amex in a year (you can earn two of these upgrades a year)
- Earn a complimentary companion reward flight when you spend £7,500 in years when you purchase a full-fare flight
- Earn 18,500 bonus miles with your first purchase within 90 days
- £140 annual fee
- 22.9% variable APR
Hotel Rewards Credit Card: IHG Rewards Club Premium
With the IHG Rewards Club Premium credit card, cardholders earn 4 IHG Rewards Club points for every pound spent at IHG properties and 2 rewards points per pound spent elsewhere. Add to this a welcome bonus of 20,000 points (worth approximately £100) and a free night each year in which you spend £10,000, and over two years the average consumer could earn around £640 of rewards (depending on how you redeem points).
IHG Rewards can be redeemed at over 5,000 properties, part of the following brands:
|Even Hotels||Hualuxe||Crowne Plaza|
|Holiday Inn||Holiday Inn Express||Holiday Inn Club Vacations|
|Holiday Inn Resort||Staybridge Suites||Candlewood Suites|
For more information on credit cards that offer hotel rewards, take a look through at our Hotel Rewards Credit Cards article.
- Earn 2 IHG Rewards Club points for every £1 spent in the UK
- Earn 4 points for every £1 spent in an IHG location
- Earn 4 points for every £1 spent abroad
- Platinum Elite status
- Earn a free night voucher (each year you spend £10,000)
- Earn 20,000 bonus points (spend £200 in the first 3 months)
- £99 annual fee
- 19.9% purchase APR (variable)
Membership Rewards Card: Preferred Rewards Gold Card
The Preferred Rewards Gold Card lets cardholders earn American Express's Membership Rewards points for spending. Assuming a value of 8 pence per Membership Rewards point, cardholders can earn 0.8% on general spend, 1.6% on flight purchases, and 2.4% on spend at American Express Travel. The full balance must be paid back every month (it is a charge card, not a credit card). By achieving minimum spend requirement you can earn a welcome bonus of 20,000 (worth around £160) and an annual bonus of 10,000 points (worth around £80). Be aware of the £140 annual fee – we estimate you'll need to charge £17,500 a year just to make up for this fee (except that the annual fee is waived in the first year).
Assuming average UK household spend that can be applied to a credit card of £22,000, the Preferred Rewards Gold Card can deliver £580 of value over the first two years. Much of this value is created in the first year, due to the welcome bonus and the waived annual fee. Think about whether or not you’d use other features like lounge access, travel insurance, an annual hotel voucher and Hertz discounts.
- Earn 1 Membership Rewards point per £1 of general spend
- Earn 2 Membership Rewards points per £1 of flight purchases
- Earn 3 Membership Rewards points per £1 of spend at American Express Travel
- 20,000 point welcome bonus (when spend £2,000 in the first three months)
- 10,000 point annual bonus (when spend at least £15,000 each year)
- Two free airport lounge visits a year
- Travel insurance
- A $75 hotel credit each year, valid at one of 350 hotels worldwide
- 10% of Hertz base rates, and other perks
- £140 annual fee (waived first year)
- The full balance must be paid back every month (charge card not credit card)
Summary of Rewards Credit Cards
Below is a summary of some rewards card across different categories.
|For...||Credit Card||Quick Summary and Estimate Rewards Rates|
|Cashback||Platinum Cashback by American Express||1% - 1.25% on all spend. 5% cashback in first 3 months (£125 cap)|
|Dining||Costco TrueEarnings||3% on dining; 2% on travel; 1% elsewhere|
|Groceries||Nectar Card by American Express||0.5% at warehouse retailers, 1% elsewhere|
|Groceries||Asda Cashback Plus||2% on Asda spend; 1% elsewhere|
|Travel||Lloyds Avios Rewards||No foreign transaction fees on purchases; Avios rewards around 1.25% on all spend; Free upgrade voucher|
|Air||Virgin Black||Approx 5% on Virgin Atlantic and holiday spend; 2.5% elsewhere; Companion Voucher and Premium Economy upgrades; 25,000 miles welcome bonus|
|Hotel||IHG Rewards Club Premium||Approx 2% at Hilton properties; 1% elsewhere|
|Membership Rewards Perks||Preferred Rewards Gold Card||Approx 0.8% on general spend; 1.6% on flight purchases; 2.4% at American Express Travel|
Average Rewards across Credit Cards
How to Choose a Rewards Card for You
Choosing a rewards card is largely a personal decision, based on your spending patterns and the type of reward you prefer to earn. For instance, cards often specialize in a certain category of spending (e.g., flights, hotels, dining, groceries, etc.) and return higher rewards rates in these categories. Pick a card that delivers well on the biggest sections of your budget. In our analyses we bring all calculations back to a common rewards rate based on average UK household spending.
In terms of reward type, people often wonder whether cashback, miles or points are better. This is an individual decision, based largely on your appetite for managing miles or points-based systems. Cashback cards often pay back lower maximum rewards than airline, hotel, or other points-system rewards cards. However, the potential rewards on these air, hotel, and points-based cards are not always realized - all too often, companion vouchers expire unused and miles/points flounder in their accounts. With a pure cashback card (i.e., statement credits, not store vouchers) you will get your rewards, straight into your wallet (well, straight to your credit card statement).