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What are credit card rewards worth?

With there being a wide range of credit cards offering rewards, it can be tough for consumers to determine their best option. For example, the simplicity of cashback cards may hold appeal. They deduct a percentage of amounts spent over a set time period from an individual’s credit card bill, usually on an annual basis.

However, the potential for higher rewards at specific shops that a consumer regularly frequents may make other cards more attractive. In this scenario, a rewards credit card which accumulates points that can be turned into vouchers for spending at specific stores could hold appeal.

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Either way, comparing the value to an individual of rewards and cashback may be crucial in finding the best card for them. Here is how to do just that and, in doing so, find the most compelling opportunity to obtain rewards.

Level rewards playing field

Perhaps the most challenging aspect of choosing a cashback card is determining the value of rewards to an individual. Of course, cashback cards are fairly straightforward. They offer a percentage of every £1 spent on a card as cashback, which is usually deducted from a monthly or annual statement.

Reward cards, however, use a variety of values when determining their rewards. For example, a card provider may state that for every £1 spent, 1 reward point is accumulated, and for every 100 reward points that are accumulated, a £1 voucher is awarded. This essentially means that each reward point is worth £0.01, and each £1 spent accumulates rewards of £0.01.

Other credit card issuers may state that for every £1 spent there are 5 reward points accumulated, and that a £1 voucher is awarded for every 500 points that are accrued. In such a scenario, each point would have a value of £0.002. This means that this credit card essentially offers the same amount of rewards as in the previous example, with each £1 spent being worth £0.01 in rewards. However, because each £1 spent on the card accumulates 5 points, it may seem at first glance to be more generous than the previous example, where one point is accumulated per £1 spent on the card. As such, it is important to level the playing field and work out the monetary value of rewards.

Furthermore, it is a good idea to consider the impact of any annual fee on the overall cashback or rewards that are received. In some cases, a lower monetary value of rewards may be more appealing than a higher rate if the card has no annual fee.

Spending opportunities

Where rewards can be spent often differs between credit card issuers. While cashback is deducted from a statement, rewards can be a little more complicated. In some instances, a voucher that can be only be spent at a specific retailer, for example at a major supermarket, may be awarded. In other instances, a voucher that can be used at a variety of retailers may be issued, with there being the potential for its value to be boosted at specific retailers that have signed up to a credit card issuer’s programme.

Therefore, as well as considering which credit card offers the highest monetary value of rewards, it is logical to consider where accumulated points can be spent. Should this be at stores that an individual regularly frequents, it may make sense for them to proceed with the credit card in question. However, if the rewards are for a retailer that they only use every so often, there may be better opportunities elsewhere.


As ever, finding the best reward card depends on an individual’s personal circumstances. For consumers who are looking for a simple means of obtaining rewards, a cashback card could be a good starting point. However, should a rewards card offer a higher monetary value per £1 spent, it could be appealing if its rewards can be spent at a retailer that is frequented by the individual in question.

See our list of top rewards cards.

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