Britons are being squeezed by the cost of living crisis and many will be looking for smart ways to make their money go further.
One such route is to use a debit or credit card with access to a decent rewards scheme.
American Express, Virgin Atlantic and Barclaycard Avios cards currently have pretty generous sign-up bonuses to help start a pot from scratch.
Free money: Certain credit cards offer a host of rewards – including points that can be used towards flights
They can go under the radar because you may need to convert your points into another loyalty currency to get your reward.
This is Money has scoured the market and picked the best rewards schemes currently available.
We have chosen these deals because we think that they offer something that makes them stand out from the crowd.
Virgin Money’s current account switch incentive offers new customers 20,000 Virgin Points to spend via its rewards club Virgin Red.
Virgin Red is a rewards club that turns everyday spending into points. Once you are a member, you can earn and spend Virgin Points across 250 different rewards.
It has partnered with a number of brands including John Lewis and Partners, eBay, Asos and Just Eat, which means you will get Virgin Red points when you shop with these brands.
While there are some deals offering large amounts of points for every £1 spent, other purchases offer much less.
For example, customers can earn eight Virgin points for every £1 spent with Booking.com, four Virgin Points per £1 spent with John Lewis & Partners or just one point per £1 spent with Boots or eBay.
Virgin Red is a rewards club that turns everyday spending into points.
Another issue is that there is no cash conversion for the points with the value varying from partner to partner depending on the reward on offer.
This could make it tricky for people to understand how much benefit they are actually getting from the scheme, although if you run the numbers on some of their rewards you’ll see that you are getting roughly 0.5p per Virgin Point.
Customers can choose from across 250 rewards including a return flight to the Caribbean, a case of Virgin Wines, or if you’re a Greggs enthusiast, 100 sausage rolls.
Those taking advantage of the current account switching deal will also benefit from 2.02 per cent interest on their current account balances up to £1,000.
Customers will also have access to a linked savings account paying 1 per cent on balances up to £25,000 and 0.5 per cent thereafter.
What can 20,000 Virgin points buy you:
There are more than 250 rewards to choose from with Virgin Red.
For example, it is currently offering a 12-bottle case of Virgin wines for 16,000 points.
You could also opt to buy a Greggs sausage roll for 200 points each time – that could equate to 100 sausage rolls.
At the other end of the spectrum you could book a return Virgin Atlantic flight to New York, Barbados or The Bahamas for 20,000 points, although taxes, fees and surcharges are paid separately.
You can find out more about the options available here.
Spoilt for choice: there are more than 250 rewards to choose from with Virgin Red.
You’ll need to apply online for an M Plus or Club M current account with Virgin. Although the M Plus account is free, the Club M account charges £14.50 a month.
You’ll need to switch your existing current account using the Current Account Switch Service and set up at least two Direct Debits.
You’ll also need to save £1,000 into the linked savings account and keep this in your account until Virgin emails a Virgin Red promo code to you. You’ll need to then join Virgin Red if you aren’t already a member.
Unlike with some rewards offers, Virgin points don’t expire, however, your Virgin Red promo code to claim your points will expire on 30 April next year, so make sure you redeem your Virgin Red promo code before that date.
Rob Burgess, founder of frequent flyer miles website Head for Points, says: The problem with Virgin Points was, historically, Virgin Atlantic’s limited route network.
A new tie up with Air France and KLM has vastly expanded your options for redeeming for flight rewards.
The new Virgin Red app also offers lots of new ways to redeem for everyday spend, including Greggs food.
Virgin Red redemptions are generally poor value – you get around 0.5p of value per point – but there are some gems.
You could recently get a 12 night full board Virgin Voyages cruise, from Portsmouth to Spain, for 2 people for just 80,000 points – this was selling for £2,500.
Barclaycard’s two new credit cards offer customers the opportunity to collect Avios points for every £1 they spend.
This card is a Mastercard, offering more flexibility than the long-running British Airways American Express cards.
Avios points are a way for you to turn your everyday spending into flights with BA, Aer Lingus, Iberia, among other airlines.
The free version of the card will give you 5,000 Avios points if you spend £1,000 in your first three months.
Existing Barclaycard customers who switch to this card collect 1,000 points if they spent £1,000 in the first three months.
Separate to the introductory offer, you will also collect 1 Avios for every £1 you spend – the same rate as the existing free BA Amex.
Barclaycard’s two new credit cards offer customers the opportunity to collect Avios points for every £1 they spend.
Those who opt for the Barclaycard Avios Plus will collect a whopping 25,000 Avios if they spend £3,000 in the first three months.
Existing customers will collect 5,000 points if they spend £3,000 over the same period.
They also get an improved return on their spending – 1.5 Avios for every £1 spent.
However, they will be subject to a £20 monthly charge. This is an important factor – because unlike the equivalent American Express rewards cards, which charge annually, once the bonus is secured you could downgrade to the free option. You can even downgrade via the Barclaycard app with no need to call up.
Avios points can be converted into flights, flight upgrades and hotel stays – but the perks don’t just stop at Avios points.
Spend £20,000 on the free card within 12 months and you’ll receive a British Airways cabin upgrade voucher to use on an Avios Reward Flight booking. For those using Avios Plus, the requirement is only to spend £10,000 in the first year.
Cashback: You can book a Reward Flight starting at just £1 and 18,500 Avios points.
You can also get up to five months of Apple Music, Apple TV+, Apple News+ and Apple Arcade for free with the new Barclaycard – although this turns into a paid subscription after the trial so you’ll need to cancel if you wish to avoid being charged thereafter.
It’s also worth noting that a new Barclays Premier current account holder joining Barclays Avios Rewards (£12 per month), in addition to taking out the new Barclaycard Avios Plus card (£20 per month) as a new customer, could earn over 80,000 points and two cabin upgrade vouchers in the first year – enough for a return flight to New York, Tokyo or Dubai.
They would also receive £5 back into their current account, each month, for holding both products.
What are the rewards worth?
The answer to this question is similar to most rewards schemes. It depends.
A partnership launched with Nectar in early 2021, lets you trade 250 Avios for 400 Nectar points, worth £2.
This means that each Avios point is worth 0.8p when used to shop at Sainsbury’s, Argos, eBay and other participating companies.
Therefore, the advice is to not redeem your points for flights if you get less than 0.8p.
However, you can spend your Avios on all kinds of travel experiences and this will typically be the more lucrative way to use Avios points – although not always.
It will depend on what class you choose to fly in, whether you are flying peak time or off-peak time and on which airline you decide to fly with.
You can book a Reward Flight starting at just £1 and 18,500 Avios, or you can reduce the cash price of your flight with as little as 1,000 Avios, albeit you will still need to pay taxes, fees and carrier charges.
An off peak return flight for one passenger from London to Milan will cost 18,500 Avios and £1 for an off peak ticket.
However, flights to North America will start from £100 and 50,000 Avios points for a return flight.
The £20 monthly fee for the Barclaycard Avios Plus – £240 a year may be too terrifying for some to stomach.
It’s also worth noting that if you fail to pay the balance off each month you will be hit with a 72.4 per cent APR. That makes it absolutely essential to pay off as you go along, or end up with a hefty penalty.
Rob Burgess says: The new Barclaycard Avios Mastercard, launched last month, should be top of the ‘next credit card’ list for all points collectors.
You can use it instead of, or alongside, a BA Amex card to earn points whenever you shop, even if Amex is not taken.
There is a big sign up bonus which you qualify for even if you already have a BA Amex.
It is actually the most generous Visa or Mastercard in Britain, at 1 Avios per £1 spent on the free card.
Even if you are a non-flyer, you would get 0.8 per cent back by moving the Avios to Nectar points which is triple what the average rewards Visa or Mastercard earns.
With flight prices likely to remain high for some time and with BA now guaranteeing at least 14 Avios seats per long haul flight (12 on short haul) the chances of getting good value are high.
American Express credit card holders can benefit from a limited time bonus offer when they invite friends or family to become a new Cardmember.
Running from 7 April to 19 July, 2022, existing Gold Cardmembers will have their points doubled with 12,000 Membership Rewards points for each eligible referral compared with the standard 6,000 Membership Rewards points.
The invited friend will then receive at least 32,000 Membership Rewards points if they select the same Card, compared to the standard 22,000 Membership Rewards Points.
Those signing up without a referral can still potentially secure 30,000 rewards points as part of a bonus deal currently on offer.
For those who don’t sign up using the referral bonus it is currently possible to take advantage of an introductory offer of either 20,000 or 30,000 bonus points when you spend £3,000 in their first three months.
The amount of points will depend on what offer Amex shows you when you go on the site. They are targeting certain people with an extra 10,000 points based on browser history etc.
30,000 points is enough for a £150 gift card from Amazon. For frequent flyers, it can also be converted into Avios points.
The Amex Gold card is great for rewards, but beware of the £140 fee after year one.
It’s worth noting that if you sign up from someone’s referral you won’t be eligible for the 20,000/30,000 bonus offer as well.
You also earn one Membership Reward point for every £1 you spend, and two points for any airline or foreign currency purchase.
There is also the added benefit of getting £5 back twice every month by spending on Deliveroo, which is worth £120 per year for regular Deliveroo users.
Finally, you can take advantage of two complimentary lounge visits per year at over 1,300 airport lounges globally.
It comes with a £140 annual fee after the first year. However, if you cancel before your first year is up, you’ll essentially have enjoyed this card for free.
If you fail to pay your balance off each month, you’ll be hit with a 60.1 per cent APR.
It’s also worth noting that there are other American Express cards with limited time offers at present.
New and existing American Express Preferred Rewards Gold cardmembers can tuck into an exclusive new benefit with Deliveroo.
The Platinum Card is offering 60,000 points when you spend £6,000 in your first six months of membership, although the card comes with a whopping £575 annual fee.
For those put off by the annual fee Platinum Cashback Everyday Credit Card is currently offering 5 per cent cashback on all spending for the first three months of card membership, up to a maximum of £100 with an additional £20 cashback bonus.
Each year, you’ll also receive 0.5 per cent cashback when spending up to £10,000 and 1 per cent cash back on everything you spend after that.
As long as you spend a minimum of £3,000 in each given year, every full £1 you spend on purchases qualifies for cashback.2
The American Express Platinum cashback everyday credit card currently offers 5% cashback on any purchases for the first three months of card membership, up to a limit of £100 + £20.
Rob Burgess says: American Express Membership Rewards points often fly under the radar but this is a mistake. They offer something unique – flexibility.
Get an Avios or Virgin Points credit card and you are committed to that scheme. This can be an issue if the scheme devalues or drops your preferred flight route.
Membership Rewards points can be transferred 1:1 to Avios, Virgin Points or many other airline schemes, plus various hotel loyalty programmes and Club Eurostar.
Transfers are instant or usually within 24 hours, depending on partner, so the chance of losing a reward due to a slow transfer is minimised.
Flexibility has real value but people often don’t appreciate this.