Retail Reward Credit Cards

How to use a retail reward credit card...

Retail reward credit cards enable you to make back some money from your typical everyday spending in points, which can be exchanged for goods and services from your favourite stores.

The key to these cards is to use them like a debit card. Make your everyday purchases on them, and don't spend what you can't pay back. Do this, and they will treat you well.

Making the most of your card:

- Budget your spending
It sounds obvious, but make sure you can afford to pay back what you spend every month. Not only will this really up your points and keep interest at bay, but it will also boost your credit rating.

- Don't make cash withdrawals
Cash withdrawals will more than likely involve a handling charge and be subject to a higher rate of interest. Keep your reward card spending confined to purchases and make cash withdrawals with a debit card instead.

- Don't buy things you wouldn't normally
Don't change your spending habits to get extra points or discounts. Try to choose a retail reward credit card that allows you to continue with your normal spending practices. You will clock up points far quicker and stay in a better financial position by swapping your typical debit card transactions for credit card purchases, rather than trying to buy specific items.

- Look for bonuses
Many companies will provide added incentives, such as double or even triple points. This can be a great way to gain loads of extra points - but as mentioned, don't buy things you wouldn't usually just to get the points. It won't pay you back!

- Get extra cards
If you trust your family/partner etc it may be worthwhile getting an additional card to build up some more points. Make sure you share the rewards though, or this idea may be short lived.

Things to watch out for:

- Trapped debts
Do not transfer a balance to these cards, no matter how tempting the offers may seem. The balance transfer will be low interest, so credit card companies will make you pay it off before any spending debts, which are very high interest. You don't have a choice in the matter; your high interest debts will simply be trapped until you can get rid of the balance you have moved over.

A better option would simply involve taking out another card specifically for balance transfers. See our balance transfer section for advice on what card to get.

Compare retail reward credit cards