As the competition in the UK lending market has become ever more intense, lenders and credit card providers have had to go to ever more lengths to attract customers to them. While there is a limit to how low they can go on interest rates, in fact many now go as low as zero per cent for well over six months, card providers can also seek to attract customers with loyalty and reward schemes. These basically reward you for every pound you spend on your credit card.



Loyalty schemes come in all sorts of variations and can offer you air miles, discounts on petrol, points and cash. Cash is probably the best reward you can get from your credit card provider as you can spend it where and when you like and you are not limited by the card provider.

As well as the type of reward, you should also be looking at how much of a reward you are getting. Most rewards will be at around sixty pence for every one hundred pounds you spend on your credit card but some can be lower than forty pence and others as high as eighty pence per hundred pounds so its worth shopping around and finding a card with a generous reward scheme.

You should not allow a reward scheme to distract you from your main purpose in getting the card however. For most people, by far the most important things to be looking at when they take out a credit card is the interest rate and other charges.

If you frequently have a balance left over on your credit card that carries forward from one month to the next, then a low interest rate on this will save you far more than any loyalty scheme will ever give you. Likewise, if a card has a good loyalty scheme but an annual subscription fee, calculate how much you would have to spend before you earn back your subscription fee. It is likely that you would have to do an awful lot of shopping to earn back the fee, and if you shop around you could probably find a reward scheme that's just as good but without the need to pay a fee.

If you are one of those customers who always pays off their credit card balance in full each month, then you do not have to worry about interest rates, as you will not be subjected to them and you can afford to choose your credit card based on its reward scheme.