Credit Card Rewards - what to go with?!

Rosiejcann

Hi All

Would appreciate some advice please.
We are about to spend thousands on our new extension which is starting next week. So I am thinking of getting a credit card to make the most of any rewards such as cash back, air miles for travel, store vouchers etc. We will be paying it off in full every month.
I'm really not sure which is best to go with, do you have any advice, or what has worked well for you?

All advice welcome!
Thanks, Rosie

eskbanker

The first question to consider is whether or not you're likely to be able to put your expenditure on a credit card - tradespeople won't generally accept these, for example.

Best cashback and reward credit cards – MoneySavingExpert offers guidance on what's currently available in the market - note that your credit status may also affect your ability to secure the best ones.

Olinda99

one thing worth considering is the Santander Edge credit card it gives you 2% back on all spending up to 1500 pounds a month for the first year. it does cost £3 a month to have so the effective cashback rate is nearer 1.8% if you spend the max £1500  a month

danco

I don't think that figure for Santander is correct. They give up to £15 cashback a month, which means £750 a month spend in the first year and £1500 spend after that year.

Olinda99

yes you are correct

WillPS

eskbanker said:

The first question to consider is whether or not you're likely to be able to put your expenditure on a credit card - tradespeople won't generally accept these, for example.

Best cashback and reward credit cards – MoneySavingExpert offers guidance on what's currently available in the market - note that your credit status may also affect your ability to secure the best ones.

Something I'd flag on that MSE advice, they describe the Amex Nectar as being "Good for Sainsbury's shoppers (and also those who fly BA a lot)." - in my view this is a bit sloppy and misleading. The card offers no advantage to Sainsburys shoppers over any others; you'll get 2 Nectar points per £ whether you shop in Sainsburys, Aldi, Lidl, Tesco... in fact anywhere which accepts Amex (other than Costco, where you only get 1 per £). Sainsburys will still pay the same 1 Nectar point per £ they'll pay anyone with a plain old Nectar card.

Nectar points themselves can be spent at the exact same rate of 500 points = £2.50 at Argos and Ebay. It's pretty damn close to a straightforward 1% cashback, with the caveat that rewards can only be spent at Sainsburys, Argos or Ebay. 

My favourite redemption is on Sainsburys fuel, which is consistently the cheapest option where I live (so I'm not 'paying more to redeem') and also there's no way of buying a discount in some other way (i.e. gift cards, online cashback etc). Again, perfectly possible to use a filling station once-a-year or so without even entering the supermarket, leave alone being a "Sainsbury's shopper".

Another thing I've noticed on that page is "Alternatively, they could be converted into 15,000 Avios, as you can swap Nectar and Avios back and forth." I presume that text dates back to when the BA/Nectar partnership launched, because for a time you could freely swap between and the points wouldn't lose value; however this is no longer the case, and you will lose Nectar point potential value by exchanging for Avios.

WillPS

Sorry for the double post - but developing the notion that Nectar points are effectively cash equivalent for the quantities a reasonable person might earn, and ignoring any sign up or introductory incentives, then these are the most effective Amex's to go for presently.

1. Spend of £3000/year or less - Amex Reward. 1MR is worth 1 Nectar point, or half a penny. Uniquely amongst Amexs this has no fee and no minimum yearly spend for reward eligibility
2. Spend of £3000-£6000/year - Amex Reward or Amex Cashback Everyday. These will each yield an effective rate of 0.5% on this level of spend. Which you go to should be determined by how much you value cold hard cash over the same in points and how frequently you'd like your rewards - as the Everyday Cashback will only ever pay out on anniversary.
3. Spend of £6000-18000/year - Amex Nectar wins hands down in this bracket - the first £3k of spend covers the fee, then every £ spent above that yields 1% equivalent cashback in Nectar points.
4. Spend of £18000+/year - Amex Cashback starts to pull ahead at this point - as £18k spend will yield £150 (or equivalent in Nectar points) on either card after the fee for each has been taken away, yet for each £ above this Amex will pay 1.25% on the Cashback card, but only the flat 1% on the Nectar card. Note that you still have to trade off the regularity of payouts, as Amex will payout Nectar points almost constantly with the Nectar card, but strictly once yearly upon anniversary with the Cashback card.

hugheskevi

You could consider a 0% purchases card and instead of paying off in full save the money at around 5% p/a interest rate and pay the card off in full at the end of the 0% period.