Most rewards cards award you points for every £1 you spend. Some schemes will, however, award more points depending on where you use your card. Cards issued by the major supermarket chains, for example, may offer more points when you spend in their stores. When you have enough points, you can redeem them for vouchers that can be spent at participating retailers or used as discount vouchers at participating entertainment and retail outlets. Some may be put towards the cost of flights instead, in the form of Avios (formerly known as Air Miles) or schemes such as Virgin Atlantic's Flying Club. Points earned for existing loyalty schemes such as Nectar Points can usually be added to the customer's account and thereby pooled with points earned from other sources.
Multiple rewards card holders can choose to spread their spending across different cards, giving them access to different schemes, or they may choose to concentrate on a single scheme, allowing them to save for the more valuable rewards on offer.
Cash back cards are a special type of rewards card that give you a straight cash reward instead of points that can be redeemed for various rewards. The amount of cash you earn is usually a straight percentage of the amount you spend on the card in a given period of time. If you spend £100 on a card with a cash back rate of 2%, for example, you would earn £2 of cash back. This is usually paid into your credit card account, paid directly into a nominated bank account or paid by cheque on an annual basis.
Reward cards of all kinds usually only award points (or cash back or air miles) for purchases made on that credit card. Cash advances and balance transfers do not usually count towards points.