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Credit card rewards and perks

This credit card reward schemes buyers guide outlines the different types of credit card reward schemes and the benefits of reward credit cards.

Many cards come with extra benefits – ways to earn reward points or cash-back, and valuable insurance and other protection. This LowerMyBills guide highlights the main benefits of credit card reward schemes.

Credit card reward scheme types

There are a number of different types of credit card reward schemes:

Cash-back cards

Cashback cards are a fantastic way to get the credit card company to pay YOU money!

Every time you spend on the card, you earn cashback, such as 0.5% or 1% - so for every £100, you spend, you get paid up to £1.

Cards can have even better introductory rates – such as 4 or 5% for the first three months and they may pay tiered rates (e.g. 1.5% on any spending over £10,000).

The table below shows how much you could earn, depending on how much you spend and differing levels of cashback.

ANNUAL PAYOUT	Spend £200 a month	Spend £400 a month	Spend £800 a month	Spend £1,600 a month
0.5% cashback	£12	£24	£48	£96
1% cashback	£24	£48	£96	£192
1% cashback with 4% for the first two months	£36	£72	£144	£288

Reward schemes

There are several types of card where you earn rewards other than cash – but are still related to what you spend.

Points schemes

There are all sorts of points schemes available – you receive points related to the amount you spend (and you may get more points for using the card at specified retailers).

You can cash these in for Airmiles, Nectar points, Tesco Clubcard points, and M&S points among others.

There are even cards where you can get money off your BT phone bill or even a discount on a new car.

Sports teams

Many football teams now have credit cards.

Every time you use the card, the issuer pays a small amount to the club. On top of this you often earn points, which you can cash in for club merchandise or prize draws.

Charity and green cards

You can apply for cards that automatically benefit good causes – such as charities or environmental projects.

At no cost to you, the card issuer will hand over a proportion of what you spend on the card (0.25%, say). They may also pay a fixed amount when you open the account and for every year you own the card.

These cards have raised millions of pounds over the years.

Other benefits

Here's a summary of the main credit card benefits:

Benefit	Why it's useful
Travel perks	Travel accident insurance: Pays out if you're injured travelling. It's not a substitute for travel insurance as it won't cover hospital bills Travel assistance: Comes in many forms – advice helplines, booking services and access to VIP airport lounges. Emergency help abroad: If you lose your card, you'll be sent a new one within a day or two. Some issuers can arrange emergency medical transport.
Purchase protection	Insurance against theft or damage for goods bought with the card. Cards may even offer an extended warranty – extra breakdown cover on top of the manufacturer's.
Internet fraud guarantees	Your maximum loss from fraudulent card use is usually £50 (unless you've been negligent). Many issuers guarantee you won't even have to pay this, but you should check the policy for exact details.
Extra consumer protection	Most, if not all, credit cards offer this – the card company will pay up if, say, a retailer goes bust before delivering goods. There are conditions (goods must cost at least £100, for instance). You should check the policy in detail for these terms.

How to remember credit card rewards

To make sure you remember your benefits, keep a list of your card's rewards in your wallet or purse – and use the right card to make best use of them.

Credit card reward schemes buyers guide brought to you by LowerMyBills from Experian

The LowerMyBills guide to credit cards reward schemes was created to give you an insight into types of credit card reward schemes, including cashback, charity and green cards, so that you have the information you need to choose your ideal reward or cashback credit card.