Did you find this article useful?
Rewards credit cards can give you access to a wide range of benefits. These include cashback, air miles, points, exclusive offers, vouchers, discounts and other perks. So it’s worth shopping around to find one that suits you.
A rewards credit card gives you special benefits for using the card. Normally, the more you spend, the more rewards you earn. The rewards vary according to the provider and type of card you choose.
Use our simple comparison tool to see which HSBC credit cards are best for rewards.
Think about your lifestyle, what you’ll be using the credit card for, and what types of rewards you want. For instance, if you eat out a lot, you could find a card offering good restaurant discounts. If you travel a lot, you could find a card featuring Air Miles, lounge access, or travel insurance. And if you’re trying to save money, a cashback credit card may make the most sense.
Explore: Credit cards
Here are some of the popular credit card rewards:
Shopping and other vouchers
Explore: Credit card special offers
A credit card allows you to buy things now and pay for them later. You’re essentially borrowing money from the provider to make purchases, subject to your credit limit.
If you repay what you owe in full every month, you won’t be charged interest. But if you carry a balance from one month to the next, you’ll have to pay interest on what you owe.
If you pay for something with a debit card, you’re spending money you already had. Every time you use your debit card the money comes directly out of your current account and you won’t be charged interest. But if you don’t have enough money in your account for a withdrawal or purchase you’ll be overdrawn, and may be charged interest for this.
The benefits of a credit card include being able to buy big-ticket items such as electronics or book flights and holidays. You can then spread out the purchase cost and don’t have to have the funds immediately available, as you would with a debit card. Credit cards can also offer purchase protection, which safeguards your purchases against damage, loss or theft within a specified period after you buy them.
You can also improve your credit score. Using your credit card regularly and paying in full each month proves to lenders that you can manage debt. This is good if you want to apply for a loan or mortgage.
But if you’re struggling with cash flow, living beyond your means, or unable to pay your credit card bill on time, you can easily slip into debt. Using your debit card can make it easier to track and limit your spending.
The other advantage of a debit card is that you can use it for cash withdrawals, which are normally free. Withdrawing cash from an ATM with a credit card incurs a fee.
Find out more: What type of credit card is right for you?
Rewards credit cards can offer great benefits, but they may also cost you more. Often, the better the benefits, the more expensive the card, or the more you need to earn to qualify for it.
Look closely at the fees and interest rates that come with a reward credit card, and think about whether the potential rewards are worth it. Will you end up paying more in fees and interest than you earn in rewards?
Always make sure you spend within your means and, if you can, pay off your balance in full every month.
Did you find this article useful?
