Cashback vs Rewards Credit Cards - which is better?

GBH2930

I'm struggling to figure this out: If you are going to have a credit card, is it better to have a Cashback or a Rewards(points) credit card?

In case it influences the advice:

• I intend to pay off in full by direct debit every month so there will never be any interest.
• There are no existing credit card debts
• NOT a big earner/spender - it would rarely be used for anything other than standard living expenses

Which type gets you more back on the spending? Maybe I'm missing it, but I can't find anything that guides you to choose between the two types

zerog

GBH2930 wrote: »

I'm struggling to figure this out: If you are going to have a credit card, is it better to have a Cashback or a Rewards(points) credit card?

In case it influences the advice:

• I intend to pay off in full by direct debit every month so there will never be any interest.
• There are no existing credit card debts
• NOT a big earner/spender - it would rarely be used for anything other than standard living expenses

Which type gets you more back on the spending? Maybe I'm missing it, but I can't find anything that guides you to choose between the two types

Obviously it depends on whether you use the rewards! A Virgin card is pretty useless if you don't fly Virgin. Then you just have to find out how much one point is worth TO YOU in pounds. For example, if you only fly economy class, one BA avios is worth about 0.1p. But if you fly first class a lot, then one avios may be worth up to 5p.

lisyloo

Well you need to convert the rewards to £s and see how much they are worth.

But remember the point or rewards are only worth something if you manage to convert them. For some people this may be easy e.g. if you are a frequent flyer, for other people there may not be an opportunity or they get lost/forgotten or not enough to get anything.

Personally I prefer cash because I know I can use it, but I have taken rewards cards where there is an initial bonus going.

simongregson

The other thing to remember is the value of points can be changed e.g. the flight for x points can become more. This can't happen with cash as you aren't forced to spend it in a particular place.

alwaystryyourbest

for me the tesco club card credit card is best,
i use the card put most of my monthly spends on it,use the points for free days out for my family...Just used up £7.50 worth of vouchers and got a free £15 new look voucher for my daughter for christmas.( then decided to get another one she will have £30 to spend after christmas.)
loads of things to use the vouchers on..
I would guess the cash back one don't pay that much...

Gromitt

alwaystryyourbest wrote: »

for me the tesco club card credit card is best,
i use the card put most of my monthly spends on it,use the points for free days out for my family...Just used up £7.50 worth of vouchers and got a free £15 new look voucher for my daughter for christmas.( then decided to get another one she will have £30 to spend after christmas.)
loads of things to use the vouchers on..
I would guess the cash back one don't pay that much...

You get 1 point per £4, so you've spent 3K on your credit card to get a £15 voucher for new look. So your basically getting 0.5% cash back. If your spending that much regularly, you would be better off with a card like Capital One.

then of course theres the Aqua card at 3% cash back, so £90 in cash for 3K spend.

unimaginative_user_name

I tend to use my Tesco card in the supermarket of that name just to accumulate the points per pound and green points which I convert to rewards for restaurants and days out, or convert them into finest wine vouchers which they do before Christmas as a rule.

However I never pay for my groceries with my clubcard as I only get one point for every £4. I always use my Amex Platinum which gives me up to 1.5% cashback. So a weekly shop of £100 would only be worth 25p in Tesco's points or £1.50 in Amex cashback.

I should add that I use my Tesco card in a shop which doesn't take Amex but I should probably get another cashback card really!

Any

It depends what has value TO YOU.
And Martin has a points converter calculator on this site. just go to the credit card section.

I personally always went for points. At first Tesco, then M&S and then Amex Nectar. There were 2 reasons - at Tesco it would work out at 1% because I convert my Tesco vouchers to restaurant vouchers, M&S because it had long 0% period and I spent the points on treats in store and then Amex because when you hit £500 a month it would also work out 1% and also, they give you the points monthly to spend. While the cashbacks were usually around 0.5%, and the points at least that, more if you did it right.

What also always made me prefer the points rather then cashback was that they usually pay out more often, either quarterly or monthly, while cashback does only once a year, and also because it actually gives rewards for your points so you have to treat yourself with it, rather then cash once a year deducted from your credit card bill.

This is the first time I am trying cashback card. Only because Amex peed me off, I no longer shop at M&S as there isn't one close and it offers more then Tesco.. in the first 3 months anyway and the first payout is not long away (as it pays out in January no matter when you opened the card, so I only have 4 months before the payout and it is 5% cashback for the first 3 months!)

Any

unimaginative_user_name wrote: »

I tend to use my Tesco card in the supermarket of that name just to accumulate the points per pound and green points which I convert to rewards for restaurants and days out, or convert them into finest wine vouchers which they do before Christmas as a rule.

However I never pay for my groceries with my clubcard as I only get one point for every £4. I always use my Amex Platinum which gives me up to 1.5% cashback. So a weekly shop of £100 would only be worth 25p in Tesco's points or £1.50 in Amex cashback.

I should add that I use my Tesco card in a shop which doesn't take Amex but I should probably get another cashback card really!

But that converted to a restaurant voucher at 4x value is £1 off in a restaurant...

sfax

Interesting debate. I've been on a Halifax cashback card for 4 years now and picked up over £1000 in cashback but there are some good rewards out there and I'm having a (fee free) year on Amex Gold to see how many points I can tot up in a year (the unknown being just how much I can use the Amex).

I checked all of the current cashback CC deals and none of them pay more than about 10% over what I already get on my Halifax card - may consider Amex platinum but again have the problem with where it's accepted

Tesco vouchers are great for Legoland annual passes

lisyloo

and picked up over £1000 in cashback

Sounds great, which card is this please?
Do you have a huge spend? or have you found a great deal?