Reward Your Summer Spending
Make the most of your summer spending - get a reward credit card.
This article was first emailed to Fools as part of our Summer Lolly campaign.
When it comes to shopping, everybody loves a bargain. And, as summer gets into full swing, many of us will be splashing that cash to stock up on ice cream, Pimm's and other summery delights.
But, what you may not realise is you could be missing out on some extra rewards at the checkout by not making the most of your shop.
This is because if you regularly shop at one particular store, by going one step further and taking out a reward credit card, you could give yourself an extra bonus every time you're at the till.
Here's a quick glance at five of the best loyalty credit cards at the moment:
Card | Typical APR | Loyalty Scheme | What Your Points Are Worth |
|---|---|---|---|
18.9% | One point for every £1 spent in-store and online. One point earned for every £2 spent elsewhere. | 100 points = £1 voucher | |
Tesco Clubcard Credit Card | 16.9% | Five points for every £4 spent at Tesco stores or Tesco.com. One point for every £4 spent elsewhere. | 100 points = £1 voucher (minimum 150 points required). In addition, £2.50 Clubcard vouchers = 60 AirMiles. |
18.9% | 5,000 Nectar bonus points on first use (£200 spend required). Double Nectar points for the first three months. Two points for every £1 spent at Nectar partners. One point for almost every £1 spent elsewhere. | 500 points = £2.50 voucher. Nectar points can also be redeemed against other points offers. | |
John Lewis partnership Card | 16.9% | One point for every £1 spent in-store or online at John Lewis, Waitrose and Ocado.com. One point for every £2 spent elsewhere. | 500 points = £5 voucher |
Asda Credit Card | 17.8% | One point for every £4 spent. | 100 points = £1 voucher. Customers also get 2p off per litre of Asda fuel purchased with the card. |
A sweeter reward
In my opinion, one of the best loyalty schemes at the moment is Nectar. Hundreds of retailers have signed up, including Sainsbury's, Dollond and Aitchison and even online powerhouses such as eBay and Amazon (you have to go via the Nectar website to qualify for points at these retailers).
With an American Express Nectar Credit Card, you can combine the points you earn with your Nectar loyalty card with even more points on the credit card - in some cases doubling your rewards.
When you use the cards together, you can get up to four Nectar points for every £1 spent at a Nectar partner. Shop anywhere else and you'll get one point for every £1 spent.
In addition, you'll not only get double Nectar points for the first three months, but a whopping 5,000 Nectar points after you've spent a total of £200. That's enough to get five free off-peak Vue cinema tickets, or £25 off your next Sainsbury's shop.
Alternatively, if you fancy a bit of jet-setting courtesy of your reward card, Tesco's Clubcard scheme lets you convert your points into AirMiles, meaning every £250 spent gets you 60 miles. This could be handy for those wanting to clock up some extra mileage while they shop.
It's not just any reward card...
One of my mum's favourites is the Marks & Spencer Money MasterCard. This is because as well as earning one point for every £1 spent, Marks & Spencer sends out regular promotions that cardholders can use on top of their vouchers.
Another handy feature of this credit card is the 55 days interest-free credit, and no cash advance fee when you pay for your M&S travel money using the card - a handy feature for those needing a bit of extra leeway before jetting off on holiday.
A universal reward
Reward cards may be tempting, but if you prefer a credit card with a bit more flexibility, why not consider a cashback credit card instead? That way, when it comes to claiming your reward, you won't be restricted to selected retailers.
The American Express Platinum Credit Card is my weapon of choice, offering 5% cashback (up to £4,000 spend) for the first three months, with up to 1.5% cashback thereafter.
Alternatively, Capital One's Cashback MasterCard offers 4% cashback for the first three months (up to a £1,500 monthly spend), together with 1% cashback thereafter.
Reward cards may seem like a lot of effort sometimes, and you may be left wondering if you'll ever save up enough points for that dream holiday, at the cost of...1,000,000 points.
However, if you start small and use your card regularly, you could end up with some modest but useful savings, giving you a handy reward to boost your summer shopping - at no extra cost to you!
Checklist
Reward and cashback credit cards are only for people who pay their balance off in full each month.
This is because the APR on these types of cards tends to be higher than cards without rewards. Fail to pay off your balance in full, and the interest accrued will easily outstrip any gains.
If you usually leave a balance on your credit card, why not consider a 0% on new purchases credit card instead?
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