Get £339 for using your credit card

Which credit card gives you the most valuable return on your spending? Reward cards, cashback cards or airmiles cards? John Fitzsimons investigates.

I’m in the process of paying off a bit of credit card debt I built up when I got married, and want to ensure that in future I get a proper return on the money I spend on my card.

So I decided to look at just what sort of return you get from the best reward cards in the market, to see which really is the best. In all of the examples below, I am going to base the return on a spend of £9,000, or £750 a month, a figure easily achievable if you are determined to use your credit card for the majority of your expenditure

As I’m a big fan of all things Airmiles, let’s start with the Lloyds Duo Airmiles cards.

Free holidays

The Lloyds Duo Airmiles cards are running a terrific promotion at the moment, where so long as you are accepted by 30 April and spend £10 on the card by 30 June, you will be rewarded with a brilliant 1,500 mile voucher. Ok, the voucher has to be used by the end of the year, but that’s not a hardship is it!

Related goal

Have a cheap holiday

Find out how to cut the cost of your flights, get discounts, tip correctly, spend wisely, get cashback and most importantly, cut the cost of your holiday.

Do this goal

With the Lloyds Duo cards, you get two credit cards – an American Express and a Mastercard. You then get 1 mile for every £10 spent on the Amex, and 1 mile for every £50 spent on the Mastercard. This is simply because Amex is not accepted everywhere, so you are covered for all spending, no matter where you do it.

To keep things fair, I’ll presume half of the annual spending is on each card, giving you a total of 450 miles from the Amex and 90 miles from the Mastercard, a grand total of 540 miles.

Sadly, on its own, that’s not quite enough to cover the cost of a flight to even the Zone 1 Airmiles locations, places like Dublin and Paris. Of course, it’s easy enough to boost your Airmiles total by shopping in partner retailers like Tesco, Shell and Travelex. And of course, combined with the voucher, it’s a total of 2,040 miles, easily enough for zone 2 locations like Barcelona and Rome.

Just how much a flight to Barcelona, for example, is worth all depends on when you book. According to BA’s website, return flights to the Spanish city next weekend are available from as little as £246 per person, so with the Lloyds Duo Airmiles cards you are looking at a return of at least £246 a year for a £9,000 spend.

• Adopt this goal: Have a cheap holiday

More free holidays!

Of course, it’s not just the official Airmiles scheme that boasts such a rewards package – British Airways offers its own reward credit cards, alongside American Express, to enable users to get enough points for a free holiday.

I’ll focus on the British Airways American Express card, rather than the British Airways American Express Premium card, as with the former there is no annual fee, though obviously the return on your spending is not as good.

With the British Airways American Express card, you get a return of 1 BA mile for every pound you spend. Again, there is a bonus involved in the first year, of 1,000 BA miles so long as you spend £500 in the first three months.

So a spend of £750 a month will give you a total of 10,000 miles (you can work out the return on various monthly spends on the BA calculator). That may sound like a lot more than the official Airmiles scheme, yet again that will only cover flights to Zone 1 regions, like Belgium, Switzerland and the Netherlands. However, you can opt to pay an extra £60 on top of using varying amounts of your BA miles, that opens up Zones 2 and 3, encompassing locations such as Italy, Portugal, Turkey, Tunisia and Greece.

So, for the cost of an extra £60, your spending for the year could get you return flights to Tunisia this coming weekend, which start at £339 per person.

Obviously, though, those miles have to be used on BA flights, which - considering the recent vote to strike - might not be such an attractive idea at the moment...

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Get reward vouchers for your shopping

One rewards card that has really caught my eye this year is the Express Rewards card from American Express.

This card offers a tiered reward scheme, based on where you do your shopping. So you get 3 points for every £1 you spend in supermarkets, 2 points for each £1 in department stores and 1 point for every £1 you spend elsewhere.

Spend £500 on the card in the first three months and you’ll get a bonus 6,000 points on top. When you hit 5,000 points, you are then sent out a £25 voucher which can be used in 13 partner stores, including iTunes, HMV, Waterstones, Boots and Homebase.

In the interest of fairness, I’ll presume your £750 monthly spend is divided equally between these three retail arenas, giving you an annual points total of 18,000 points. That’s a return of £75 in vouchers from the Express Rewards card.

• Watch this video: Get £150 just for using your credit card

The supermarket card

Alternatively, if you shop at Sainsbury’s then going for the Sainsbury’s credit card may offer you the best return.

With the card, all shopping in the supermarket will earn you 2 Nectar points for every £1 you spend in store. You then get an additional 1 point for all £5 spent elsewhere.

So, assuming half of your spend is in Sainsbury’s every month, you’ll finish the year on 9900 points.

That gives you the equivalent of £47.50 to spend on the various Nectar partner schemes from the Sainsbury’s credit card.

Cold, hard cash

Alternatively, you might want the reward of simple, actual money in return for spending on your credit card.

The top two cards in this market, in my view are the American Express Cashback card and the Egg Money card.

With the American Express Platinum Cashback card, you are rewarded with a 5% rate of cashback on your spending in the first three months, up to a maximum of £100, followed by tiered rates of up to 1.25% depending on how much you spend on the card over the course of the year.

Spend £9,000 on the card, and in the first year you’ll get a return of £166.25.

In contrast, the Egg Money card pays a flat rate of 1% interest, and also charges a monthly fee of £1. So over the course of a year, spending £9,000 would net you £78.

Have a read of The very best cashback credit card to see which one is best for you.

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