This includes interest free credit cards, balance transfer, cash back cards, prestige credit cards, and rewards based credit cards, amongst others. There are even specialist credit cards available for those with damaged credit and these can help to repair their credit over time through sensible use and responsible repayments.



Moreover most credit cards, now also provide rewards, as incentives for the user including gift vouchers, air miles, rewards points that can be redeemed for various items and travel rewards that can be exchanged for travel related services and goods.

The person most suited to a rewards based credit card is the card holder that tends to repay the balance on their card in full each month and therefore does not get charged any interest. If you only make a partial payment on your balance each month you will be charged interest, and the amount that you pay in interest will by far outweigh the rewards that you accrue from using the card.

However, if you do not have to pay any interest because you settle your balance in full within the interest free period then you have nothing to lose and everything to gain from using these cards. Although, it seems that even those that are suited to reward based credit cards are not making the most of them. The best way to use these cards is to spend on them regularly, as the more you spend the more rewards you will earn, and then repay the balance in full within the interest free period.

You should avoid making cash withdrawals and transactions, as not only are they costly in terms of fees but you will also no earn any rewards for these types of transactions.

However, while many rewards based card holders may know the best ways to earn rewards and avoid fees on their credit cards, it seems that many are not so savvy when it comes to claiming their rewards. Recent research has shown that an alarming number of cardholders are sitting on unclaimed rewards such as air miles and gift vouchers, defeating the object of having the credit card in the first place.

Recent research shows that the average rewards based cardholder has around £42 of unclaimed rewards on their card, whilst around 20 per cent of these cardholders have around £160 in unclaimed air miles.

One official said: “It's fairly typical for a company to offer customers an incentive to join their club. Whether it's reward points in a supermarket or air miles for choosing a specific airline, loyalty is meant to pay.”

He went on to state: “However our research shows that while these schemes are a clear incentive to buyers, we as customers do not fulfil our end of the bargain and spend our hard earned rewards. Which means providers have won twice by getting your business and then not having to reward your loyalty as agreed. If this shows anything it's that there are very few reward schemes that genuinely work. Perhaps the best bet is to stick to a cash back credit card, where at least you are automatically rewarded in pounds and pence.”

According to the report older people aged 55 and over are most likely to be hoarding rewards on their cards, and those in London and the South East are also most likely to have unclaimed rewards in terms of location.

All cardholders should check and see whether they have outstanding rewards on their cards, as there may be a deadline by which the rewards must be claimed, which means that the cardholder could otherwise lose out.

Rewards based credit cards can prove very useful for some consumers and whilst the level of reward per pounds spent on the card is low, it can quickly add up if you use the card regularly.

You can use your card for everyday purchases such as petrol and shopping and then repay the card with the money that you would normally have put aside for these purchases. This can help to boost your reward levels.