Seven credit cards.
For shoppers seeking ways to make their cash stretch further, a reward credit card has always been touted as a quick win.
Yet with Sainsbury’s Bank reducing its points offering from November, are these cards still worth the effort?
The answer is potentially ‘yes’ if you are willing to use them for all your day-to-day spending.
Reward credit cards give shoppers cashback or reward points for every pound they spend – but there are catches
But there are pitfalls to watch out for — the biggest being charges of up to 104 per cent APR if you don’t repay the debt in full each month, wiping out any potential gains.
Here, we’ve looked at the best cards for households spending £1,000 a month…
For those only interested in cash rewards, the Amex Platinum Cashback Everyday Credit Card offers a healthy welcome bonus of 5 per cent cashback during the first three months, worth up to £100.
After the introductory deal ends, you’ll earn 0.5 per cent cashback on spending of up to £10,000 in a year, and 1 per cent above that.
You will need to spend at least £3,000 a year to earn any cashback. Putting £1,000 a month on the card for a year would get you a total of £160.
The Amex Platinum Cashback Credit Card works out better if you spend more than £10,000 a year.
It comes with a 5 per cent bonus offer — capped to £125 — in the first three months, and higher cashback rates of 0.75 per cent on up to £10,000, and 1.25 per cent above that.
The cashback is paid annually. The annual fee is £25 but those putting £1,000 a month on the card would get £206.25 in bonuses.
The Amex Preferred Rewards Gold offers a bonus 20,000 membership points when you spend £3,000 or more in the first three months.
This is on top of a basic earning rate of one point for every £1 spent (excluding some transactions such as foreign exchange purchases).
Top deal: For those interested in cash rewards, the Amex Platinum Cashback Everyday Credit Card offers a welcome bonus of 5% cashback during the first three months, worth up to £100
After spending £1,000 a month for a year, you’d have a total of 32,000 points including the welcome bonus.
From October 12, you can also get a bonus 5,000 points for spending £10,000 in your membership year.
The benefit of Amex points is they are versatile — you can redeem them at High Street stores, airlines and hotels.
Around 30,000 points can be traded in for gift cards of about £150 at Currys and Selfridges or you can use them to pay for £135 of purchases at Amazon.
You get more value for your points by exchanging them with Amex’s travel partners, including BA, Virgin and Eurostar.
About 33,000 points can earn rewards such as a night away at a luxury Marriott Bonvoy hotel or a return economy flight to Los Angeles with Virgin Atlantic.
To trade in Amex points for flights or holidays, you will need to convert them to points on a different scheme, such as Avios, Virgin Atlantic Flying Club or Hilton Honors.
There are also other benefits, such as £5 back on Deliveroo purchases twice a month, as well as two complimentary visits to an Amex airport lounge (four from October 12).
The card is free for the first year. After this there is an annual fee of £140, but you can cancel the card before it kicks in.
Members can keep their points after cancelling if they have converted them into another points currency, such as Avios.
Take-off: The British Airways American Express credit card is a good option for collecting Avios points, as well as picking up a free flight for a family member or friend
The fee-free British Airways American Express credit card is a good option for collecting Avios points, as well as picking up a free flight for a family member or friend.
You earn one point for every £1 spent, as well as a 5,000 bonus if you spend £1,000 in the first three months after signing up.
Spending £1,000 a month for a year would get you 17,000 Avios points — almost at the 18,500-point threshold for a £1 Reward Saver return flight to a European destination.
On top of Avios points, you get a free companion voucher for spending £12,000 a year, which you can use to take a relative or friend with you on the same flight in economy.
Or if travelling alone, you can opt instead for a 50 per cent discount on the Avios price you pay for your flight.
You’ll still be charged taxes and carrier fees on the flights.
More serious Avios collectors with big monthly spends should consider the Premium Plus Card, which gives you 1.5 Avios per £1 spent.
You will also get a free companion voucher when spending £10,000 a year, and your partner or friend can travel in the same cabin if you book a premium or business-class seat.
This has a £250 annual fee and interest on purchases is charged at 26 per cent if you do not clear your balance in full each month.
The APR of the card — an industry-wide measure designed to help customers compare the cost of credit, which takes into account its interest charges and fee — is 103.7 per cent.
Loyalty rewards: Tesco Clubcard points can be exchanged for three times their worth with its Reward partners, worth £45
Shoppers loyal to Tesco and Sainsbury’s can get money off their shopping with the store’s own credit cards.
With Tesco Bank’s credit card you can earn five points for every £4 spent in Tesco, and one for £8 spent elsewhere. Spending £1,000 a month outside of Tesco would earn you up to 125 Clubcard points, worth £1.25, or £15 a year.
Clubcard points can be exchanged for three times their worth with its Reward partners, worth £45.
Sainsbury’s Bank’s credit card is about to change its points system to give one point for every £2 spent at Sainsbury’s, Argos, Habitat and Tu clothing — on top of its usual points awarded for using a Nectar card.
Don’t be tempted to overspend for the sake of getting bonuses. But add a family member or partner to your account to earn cashback faster.
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Find out what monthly payments would be on a loan and the total cost over its lifetime, where interest is charged monthly.
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Warning: This calculator does not factor in the time it would take to repay a credit card debt where the minimum payment is calculated as a percentage.
This calculator will show you just how long it’s going to take you to clear your credit card balance if you don’t wake up, face reality, stop paying the bare minimum and start clearing this punitive form of debt. Average rates are around 26.2% – many much higher.
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Originally posted 2022-10-11 09:55:58.