If you manage to pay off your balance each month, avoiding the interest that the British Banker's Association says 75 per cent of cards carry, you'll find some great rewards for the picking - from cashback to free flights.

There are three main types of reward credit cards available; loyalty cards, points schemes and airmiles.

Whichever type you go for, remember that you absolutely always have to pay your card off in full at the end of the month. As soon as you start paying interest, you'll simply be paying for those "freebies" you're working towards.

These reward credit cards encourage you to spend your money with a certain company - to be loyal to that company. The best type of loyalty card is one that gives you points for things you would be buying anyway such as your weekly supermarket shop.

These reward credit cards are great because they give cold, hard cash in return for what you spend - and obviously you can spend it where ever you want. Some have restrictions on how much you can spend but by using it as much as possible, but you could still make as much as five per cent on some of the current best buys.

Because it can take a long time to collect enough points to actually get anywhere, airmiles reward credit cards fell out of fashion for a while. However, a new breed has emerged, some offering bonus points that encourage you to spend more in the first three months, and others that just offer higher returns.

You have to be 100 per cent disciplined in your finances and never pay interest at the end of the month.

If you think that you might be tempted to run up high bills in order to earn more points without avoiding interest, then don't even consider reward credit cards - try a zero per cent purchases card instead. And if you