Making The Right Choice Of A Rewards Credit Cards

Reward credit cards are becoming increasingly popular in the UK. These are similar to cash back credit cards, points being accumulated every time they are used. When the number of points on the reward credit cards reach a pre-defined level, the points are exchanged for 'money-off' vouchers. These vouchers can be used at stores, supermarkets and other outlets who opt to partner with the issuer of the reward credit cards.

Types of reward credit cards

Several credit cards issuers, including many high street banks, offer reward credit cards to their customers. One of the most recognised programmes in the UK is Nectar. The Nectar scheme, now run in association with American Express, allows consumers to acquire 1 point for every £2 spent on their purchases. Points are redeemed at the Nectar web site, and can be used for a whole range of purchases.

Besides Nectar, several other reward cards are in operation. Among some of the most notable are '&More' Marks & Spencers and John Lewis.

Lloyds TSB is one of the latest entrants into the rewards market. The bank has just launched their Lloyds TSB Rewards Credit Cards in association with American Express. Their offer is that you earn 1 point for every £1 spent, and are redeemed via phoning a special rewards hotline. Lloyds TSB has tie-ups with at least 20 major partners, including well-known high street stores and entertainment outlets.

Which one of the reward credit cards will you choose?

Selecting which of the many reward credit cards to carry is very much down to your own personal preference. Some people choose reward credit cards where the rewards are a treat for themselves and/or their family. For instance, some reward credit cards provide free entry to UK theme parks - perfect if you want to treat the kids to a great day out.

Alternatively, you could choose to use them as a way to save up for larger purchases. They can be used to buy a whole range of goods from new fridge-freezers to a new PC or laptop.

One thing to be mindful of when deciding which reward credit cards to use is the APR. The APR is the standard rate of interest applied to credit cards once the initial free-interest period on the credit cards has ended. If you intend to pay off the balance every month, then the APR is of little consequence. However, if you are likely to make large purchases and opt to pay the balance off over several months, low APR credit cards are likely to be more suitable. This is because reward ards tend to have a relatively high APR.

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