In the recent years, the UK credit card industry has witnessed stiff competition. So credit card providers have been searching for innovative ways of enticing customers to use their package of products. Many have resorted to reducing prices with credit card rates than what was available in the past. Today you can get 0% credit card interest rates both on balance transfers and purchases. Though these rates may be offered for limited introductory periods of few months, you will notice the consistent reduction in prices in the market as credit card providers have been resorting to novel methods of increasing their customer base.
The method commonly used by credit card companies is to lure the customers by giving reward schemes and incentives. These schemes are usually designed for the higher end of the market and high net worth individuals and are of interest to customers who generally pay off their total credit card bills entirely and thus have to pay no interest charges. This means that as these customers are not paying any interest, they will be interested in other features to make their credit cards unique and attractive. Reward credit cards are generally meant for this segment of credit card customers.
Reward credit cards reward you depending on the amount you spend on the credit card. Usually, you can collect rewards through 3 methods. One method involves earning cash back on the card, which is generally a certain percentage of each amount you spend. The next method involves giving points or any other type of token to the customers to accrue. They can then redeem these points for gifts like luggage, cosmetics and other goodies that the credit card company offers. Most of these reward schemes have alluring gifts and huge variety of selections. But the better option is to go for a cash back reward as it allows you to use the money any way you like.
The last method of reward is giving airmiles. Airmiles are highly popular reward, since many customers prefer to redeem them for free flights or flight upgrades to business or first class tickets. Whatever type of reward credit card you go for, carefully note the amount or rate at which rewards will accrue. E.g. some credit cards will give you one air mile per pound you spend while others will give you four. This is a major difference. Also read carefully other terms and conditions.
However various reports have been published that claims that many people are not taking advantage of the reward points. This means the entire idea of using a reward credit card is a failure. It was also found that the rewards credit card that was highly in demand was Goldfish. Just 10% of the customers of various other credit cards redeemed their reward points.