Cashback vs Rewards Credit Cards - which is better?

blitzboy

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...

If you compare how much you get back for the amount you spend I think you'd be rather surprised/disappointed. Works out at around half a % compared to the cashback equivalents. So for example you could earn approximately 6 times as much on an aqua card...

lisyloo

If you compare how much you get back for the amount you spend I think you'd be rather surprised/disappointed.

I'm not so sure.
Some of the rewards are good value. Tescos deals can be good if used when they have the deals on. A Boots advantage card (not a credit card just a loyalty card) pays 4%, so the message is DO THE MATHS.

There is no point relying on any old adages or old wives tales, you have to look at the details every deal.

However rememeber with rewards they only save you money if you USE them. So if for example you get loads of flying points, then change job and don't fly anymore you possibly have useless point.
Cash is accepted anywhere so you get 100% usage from it.

SavingFish

It is a bit of a minefield figuring out which rewards are best. As others have said, it depends on how you use your cards and how you would use the rewards in question.

My long term card lineup (i.e. ignoring intro bonuses):

Aqua: 3% cashback (first £300 of spending each month).
Creation: 1.5% cashback on petrol/supermarket spends.
Amazon: 2% back when spending on Amazon, 1% back in Amazon gift certificates on all other spending.

(I tend to buy a lot of things on Amazon anyway, so the gift certificates will get used no problem).

The short term incentives provided by Amex/Capital-one/Barclaycard make them good for the first year, but after that the tiered rates/yearly fees mean they don't make sense for me anymore (better to use the Creation/Amazon mix).

If I really wanted to confuse matters, I could also add a Halifax Clarity rewards card for the first £300 spending each month (effective cashback rate of 1.66%).

Edit: I've been wondering, why isn't the Creation card included on the top cashback cards page?

niktheguru

To answer the OP, it really depends on two things.....

1. how much you spend on the card a month
2. what you will use the cashback/rewards for.

The easiest cards are the cashback cards as you will get actual money back that you can spend on whatever you want.
With the reward cards you really need to be careful and see what those rewards are, whether you'd use them and if by using those rewards you are getting the cheapest deal?
e.g. if u say got virgin miles through your card would it be cheaper to buy a plane ticket through expedia for example than going direct thru virgin and using the miles?

For me, i always prefer the cashback cards. Remember to read the T&Cs though. Some cards pay the cashback once a year, some cards pay every month, some cards charge an annual fee.

Recommended credit cards

Halifax Clarity rewards card : You get £5 a month when you spend £300 on the credit card. (works out as 1.6% cashback), paid every month and the card also has ZERO foreign currency charges too. definitely one to have.

Capital one elite world mastercard: Graded cashback depending on how much you spend from 0.5% to 1.25%, no annual fee. Cashback paid annually.

Santander 123 credit card: 1% on supermarkets, 2% on department stores and 3% on petrol and rail. Can make great returns on this if u spend £300 on petrol a month. If you apply via a cashback website you can get some cashback too which will offset the hefty £24 annual fee!

Just my opinions really!

blitzboy

lisyloo wrote: »

I'm not so sure.
Some of the rewards are good value. Tescos deals can be good if used when they have the deals on. A Boots advantage card (not a credit card just a loyalty card) pays 4%, so the message is DO THE MATHS.

There is no point relying on any old adages or old wives tales, you have to look at the details every deal.

However rememeber with rewards they only save you money if you USE them. So if for example you get loads of flying points, then change job and don't fly anymore you possibly have useless point.
Cash is accepted anywhere so you get 100% usage from it.

Occasionally you can get a good deal from the Tesco ones yes, but it's very rare. And even if you get the quadruple value, thats still only 2%.

I quoted and replied to a post about the Tesco Clubcard Credit Card so I don't see how Boots / flying points / etc is relavent. I'm not saying there are not good reward cards, just that I dont believe Tesco is one of them.

lisyloo

I quoted and replied to a post about the Tesco Clubcard Credit Card so I don't see how Boots / flying points / etc is relavent.

Perhaps is was not drectly relevant to your reply, but rewards are relevant to the thread so we reserve the right to continue discussing them.

I still think rewards are of very personal value.
I'll give you an example.
I managed to get enough points for a free night at Holiday Inn.
As it happened I was going on holiday to New York and got a pretty expensive night at a hotel on Times square.
A free night in Barnsley was the same number of points as a free night in Times Square, New York City.
So for the same number of points I got a great deal that was worth a lot to me personally as I happened to be going there.

What you get with rewards can sometimes be of variable value e.g. the hotels were of hugely variable value.
In some cases you can really capitalise on that (as I did in Time Square) and in other cases there might be nothing you can use the points for. You might have a broken leg and be unable to take a free flight or use a free hotel.
So it really is about what it's worth to you.

As I've already said, cash is usable anywhere and you know exactly what it's worth. Rewards can be variable and that can work out in your favour sometimes and otherwise not.
I've had some cracking deals, but other times rewards do not work in your favour and points can simply be forfeted or take a lot of constant checking/effort to redeem.

just that I dont believe Tesco is one of them

I respect your entitlement to your opinion.
I believe it's personal as the deals are sometimes of variable value and have different values to different individuals.

blitzboy

lisyloo wrote: »

Perhaps is was not drectly relevant to your reply, but rewards are relevant to the thread so we reserve the right to continue discussing them.

I agree. I was just pointing out that that is not what my post was saying, which your reply suggested (by quoting it) that it was.

Yes I agree it is down to what suits each individual person as to which deals are best. With me I am yet to see the attraction of Tesco over the likes of aqua at 3% cashback (btw congratulations on reaching your max cashback already!)

unimaginative_user_name

Any wrote: »

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

And as I said in my post up to £1.50 in cashback.

By using my cashback card in Tesco's I also build up to the 1.5% discount more quickly for purchases elsewhere. I still get £1 of Tesco's vouchers per £100 spend which I indeed convert into £4 of restaurant vouchers. In other words I can make up to £5.50 in cashback/rewards per £100 transaction. With the cashback I can spend it exactly how I like.

lisyloo

With me I am yet to see the attraction of Tesco over the likes of aqua at 3% cashback

The issue generally is the amount/time limits.
The best/highest deals, tend to be limited by either time, capped by money or both.

In some cases you can re-apply but there are rules about how long you have to hold the card (usually cashback is anniversary) and when you can re-apply.

sfax

lisyloo wrote: »

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

About £1500 per month at the moment. I worked out last year as 1.3% average. You can't get this card anymore and I don't know which transactions yield the biggest % but I think it's supermarkets and fuel. It's called Halifax One. You have to call them to get the cashback paid and one redemption was £550 because i had let it build up and the guy said he'd never seen such a large cashback balance and he'd have to get special authority to release a cheque or something. Happy days