Top of main content

Credit card rewards explained

A reward credit card allows you to earn points for your everyday spending.

You can then redeem the points for a range of goods and services, such as flights, or discounts on things like fuel, meals out and hotel rooms.

Using your reward points can be a smart way to get more out of your spending, but it's important to understand how the reward program works.

How does a reward credit card work?

Before you apply for a reward credit card, think about how you'll use the card – from what you'll be buying with it, to what you'd like to earn. Different banks offer different rates for earning points, as well as different options to spend them.

Remember to look past the rewards you could earn, to make sure the overall credit card is right for you.

If you're thinking about taking out a reward credit card, here are some examples of how it could work.

Shopping points

For every purchase you make using your credit card, you could receive points. For example, for every £1 you spend, you could get 1 point. You could then save up these points and exchange them for vouchers to use in shops.

Points can vary between products, banks and, with some credit cards, currency.


Some credit cards may give you a percentage of what you spend as cashback. For example, if your card pays 3% cashback and you spend £100, you'll earn £3. Generally, this would be paid back into your account monthly, or yearly.

Depending on the product, you may also be able to convert the cashback into shopping vouchers.

Frequent flyer miles

If you're regularly taking to the air, whether it's for work or leisure, you may want to look at a credit card that lets you earn frequent flyer miles, also known as air miles. You'll be able to exchange these earned miles for flights.

Things to consider before taking out a reward credit card

Reward credit cards may have higher fees, and potentially a high rate of interest than other types of credit card.

If you're considering applying for a reward credit card, it's important to make sure you can afford to repay anything you spend on the card in full each month, plus the annual fee. If not, the fees and interest could outweigh the rewards.

You'll also need to make sure you meet any eligibility criteria.

Explore more

Your guide to the different types of credit card fees and whether you can avoid them.
Find out what APR means and how you can use it to compare credit cards and loans.
Our tips for using your credit card overseas can help you spend safely and avoid additional costs.