Reward credit cards have taken the credit card industry by storm, much in the same manner as credit cards with the lowest interest rates became all the rage earlier.

Reward credit cards let you earn points or other rewards when you spend on the card and these points can then be exchanged for goods, vouchers, or money off purchases, depending on the type of card and reward that you choose.

In order to compete for customers, more and more credit card providers are offering cardholders a reward scheme.

There are a number of different types of reward based credit cards available in the UK these days. Some of the reward credit cards that are popular in the UK are:

Cash Back Reward Credit Cards

Cash back credit cards are popular reward cards where cardholders can enjoy earning cash back for every pound that is spent on the card.

Usually this will be a percentage of the amount spent, anywhere from 0.5% or more depending on the card.

Cash advances and balance transfers do not usually earn cash back rewards, so you should avoid making these types of transactions on a cash back reward card.

Air Miles Reward Credit Cards

Air miles reward credit cards are those cards that allow you to earn a specified number of reward points for every pound of purchases charged to your credit card.

Points can then be redeemed for airline tickets, hotel accommodations or special benefits such as access to airport lounges or other priority treatment.

While many of these cards do incur hidden costs when it comes to booking ‘free’ flights, frequent flyers with the same airline will find the most benefits and access to promotions from this kind of reward program.

When considering an air mile rewards programme, it is worth choosing one which has no blacked out travel dates. Cardholders should check whether there are limits on how many miles can be earned and if any expiration terms exist.

Points Reward Credit Cards

Point reward credit cards also feature the ability to earn reward points for card purchases.

Each pound spent equates to a certain number of points. With specialty cards for a vast array of businesses, sports teams, shops and more, what you can get for your points is only limited by the type of card you choose.

Like supermarket loyalty card point schemes, credit card point schemes allow cardholders to exchange their points for vouchers, cash or discounts on goods and services. With points credit cards there’s nothing to lose and everything to gain.

Gas Reward Credit Cards

Gas reward credit cards are a great way to save energy and money at the fuel pump. Many of these cards offer 3% -10% cash back on gas purchases and 1%-3% cash back when used, depending on the bank that issues the card.

Other Types of Rewards Credit Cards

Some credit cards allow cardholders to apply their points to other rewards, such as to use their points to book holidays, pay for flights and buy wine.

Some reward credit cards allow students to use points to pay off their student loans. Some allow you to exchange points for merchandise and others allow you to exchange points for gift cards, hotel rewards, retail store coupons, car discounts and more.

Things to Consider before choosing a Reward Credit Card

Reward cards often come with high interest rates and are therefore best suited to customers who can repay their full outstanding balance at the end of every month.

However, people who do not clear their balances in full but still want to benefit from the rewards will need to be careful. The interest rates, reward levels, and types of rewards offered on reward credit cards can vary from one credit card company to another, so it is important to compare a range of cards in order to find the best one for you.

You can select the reward card according to the nature of you business, lifestyle and spending habits.

The card with highest reward or the one with rewards useful to you, can give you the maximum benefits.