Almost five million people (27%) have enjoyed holiday perks for free by paying on plastic and impressive 1.6 million have got their whole holiday for free
A third (33%) have used their reward credit card to pay for groceries and a quarter (26%) for Christmas or birthday presents
Six in ten (60%) Brits have a reward credit card, with men more likely than women to have one
Extra security when making purchases is the main reason for having a credit card (48%), but more than four in ten (43%) say they have one because of the rewards they offer
Supermarket loyalty schemes offer the best value – almost six in ten (58%) say they offer good value for money, while less than four in ten (38%) feel the same way about airmiles cards.
With Capital One set to pull its reward scheme, new research from https://www.uswitch.com/banking/>Uswitch.com, the price comparison site and switching service, reveals that nearly five million savvy credit card users are enjoying free holiday perks by paying on plastic.
While nearly three million people have enjoyed a hotel stay (15%) and 2.5 million a return flight (14%) for free thanks to the rewards they’ve racked up with their credit card, an impressive 1.6 million Brits have got their whole holiday for free (9%).
But although some are enjoying a little bit of luxury thanks to their hard-earned rewards, many others are using them to help keep their bank balance in check by getting essentials for ‘free’. A quarter (26%) have bought Christmas or birthday presents, while a third (33%) have filled up their shopping trolley with groceries courtesy of their credit card rewards.
Men are more likely than women to spend their rewards on a treat – a third (33%) enjoying a free return flight, upgrade or holiday compared to just a fifth (20%) of women – women are more likely to use theirs for groceries (35%) or gifts (28%).
Six in ten Brits (60%) have a rewards credit card in their wallet – and it is men who are more likely than women to be enjoying something for nothing. These freebies can be offset by interest charges, but with seven in ten (72%) clearing their balance every or most months, it seems savvy shoppers can enjoy the high-life without the high fees.
The promise of something for nothing is driving people to snap up certain credit cards. Although the extra security offered by a credit card (48%) is the main reason for having one, more than four in ten (43%) do so for the rewards. Fewer people get theirs because of the expense of big purchases (42%) – previously a core credit card spend.
But with so many different reward schemes on offer, it can be hard for people to make a decision. Supermarket loyalty rewards seem to offer the best value for money – almost six in ten (58%) say they offer good value for money. It’s hardly surprising that the supermarkets fare so well – not only do they play on loyalty by boosting rewards when money is spent in-store, but they also tend to offer rewards and generous 0% on purchases and balance transfers.
Straightforward cashback cards are also very popular (56%) and a sign that boosting your bank balance – instead of enjoying luxuries – is still a priority for many people. At the other end, less than four in ten (38%) feel airmiles cards offer good value for money. With most airmiles deals still needing to have their taxes paid for, for some people they just don’t add up.
David Mann, Head of Money at https://www.uswitch.com/banking/>**Uswitch.com**, says; “Getting something for nothing seems like a dream, but enjoying free flights or holidays just for putting the weekly shop on your credit card is a reality for many savvy spenders. Reward cards are hugely popular, and it’s clear to see why. As long as you pay off your balance in full every month, using your credit card for every day expenses – as well as big one-off purchases – can give you a real boost.
“Whether you want to spend your points on a treat or make a dent in those monthly food bills, there are plenty of cards out there that can help. However, with Capital One pulling their scheme in June, and RBS planning a similar move at the start of September, these deals may not be around for ever. Signing up to a great card today could help make the Christmas shop lighter on your wallet, or even pay for next year’s holiday.
“But with so many different schemes to choose from – from supermarket loyalty points, to airmiles or cold hard cash – it’s important to think about how much you’ll spend, and where. Some cards come with an annual fee – but if you spend a lot on your card this could pay for itself. And of course, racking up interest by not clearing your balance in full could end up costing you more than the rewards. So if you can’t pay of your balance in full each month then a rewards card might not be right for you.”
Best Reward credit cards
| Reward type | Credit Card | Rewards | Annual fee | RAPR | ||
|---|---|---|---|---|---|---|
| Cashback | American Express Platinum Cashback everyday Card | 5% cashback in your first 3 months (up to £100) | ||||
| Up to 1.25% cashback thereafter | no fee | 19.9% APR | ||||
| NatWest Cashback Plus Credit Card | OFFER – 10% cashback on UK restaurants/bars spending (April 1st – June 30th) | |||||
| 0.5% cashback on all other purchases1% cashback on supermarket shopping and from selected retailers | £24 annual fee | 21.9% APR | ||||
| Rewards | Tesco Bank Purchase card with 1000 points | 17 months 0% on purchases & 3 months 0% on balance transfers (2.9% fee) | ||||
| 1000 Clubcard points if you make a purchase or transfer a balance within 2 months of account opening | ||||||
| 1 Clubcard point for every £4 spent in each purchase transaction | no fee | 18.9% APR | ||||
| Barclaycard Freedom Rewards Credit Card | Double Freedom points on UK supermarket, petrol station and all Transport for London | |||||
| 0% interest on balance transfers for the first 18 months (2% fee applies) | ||||||
| 0% interest on purchases for 6 months from account opening | no fee | 21.9% APR | ||||
| Airline | British Airways American Express® Credit Card | 9000 Avios when spending £1000 within the first 3 months | ||||
| Companion Voucher when you spend £10000 in one year | ||||||
| 1 Avios for every £1 spent | no fee | 15.9% APR |
Source: Uswitch.com
FOR MORE INFORMATION
Katherine Moss
Phone: 020 3021 5893
Email: katherine.moss@uswitch.com
Twitter: @uswitchPR
Notes to editors
Research referred to in the release was conducted online by Opinium from 9th to 16th March 2015 among 7,086 credit card holders. All figures are based on Uswitch.com analysis. The figures have been weighted and are representative of all GB adults aged 18+.
When asked “Have you ever collected enough rewards for any of the following?” 15% said hotel stay; 14% said a return flight; 9% said an entire holiday package; 7% said car hire; 6% said a flight upgrade. In total, 27% said one of these. 26% said Christmas/ birthday presents; 33% said groceries. According to the UK Cards Association, there are 30.1 million credit card holders in the UK. Therefore, the number of people who have each perk is as follows: Hotel stay (15%): 0.6 30,100,000 0.15 = 2,709,000; Flight (14%): 0.6 30,100,000 0.14 = 2,528,400; holiday (9%): 0.6 30,100,000 0.09 = 1,625,400; car hire (7%): 0.6 30,100,000 0.07 = 1,264,200; flight upgrade (6%): 0.6 30,100,000 0.06 = 1,083,600; One of the above: 0.6 30,100,000 0.27 = 4,876,200
When asked “Do 60% of people have a rewards credit card?” 41% said ‘yes as part of my main credit card; 19% said ‘yes – separate to my main credit card’. In total, 63% of men said yes, 56% of women said yes.
When asked “Why do you have a credit card” 6% said ‘to collect air miles’; 26% said ‘to collect reward points’; 20% said ‘to earn cashback on all my purchases – in total, 43% said one of these. 48% said ‘to benefit from extra security when making purchases online; 42£ said ‘to pay for a big purchase.
When asked “For each of the following types of reward card, do you think they offer good or poor value for money?”, not including those who said ‘don’t know’: Reward points:15% said very good value for money, 38% said good value for money; Cashback:19% said very good value for money, 37% said good value for money;airmiles:11% said very good value for money, 27% said good value for money; Shopping store loyalty schemes:19% said very good value for money, 39% said good value for money.
When asked “Do you pay off your credit card balance in full?” 57% said ‘every month’; 15% said ‘most months’.
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