Reward cards allow shoppers to collect points on spending that can be turned into vouchers or other rewards. But analysis by data firm Moneyfacts shows these rewards can take a long time and a significant spend to add up to anything worthwhile.

Some also charge higher rates of interest on purchases than traditional credit cards, potentially outweighing any benefits.

Rachel Springall, finance expert at Moneyfacts, said: “The reason most shoppers take out a credit card with a points or rewards scheme in the first place is so they can earn something back each time they spend. Sadly, some cards will build up hardly any points depending on how they are used, so some shoppers may rightly feel their credit card has become a bit pointless.”

New regulation introduced last year capping credit card transaction fees resulted in a number of issuers scaling back or scrapping reward schemes altogether.

The new rules mean the ‘interchange fee’ card issuers can charge shops can be up to 0.3% for credit card payments, and 0.2% for debit card payments – up from the typical 0.8%

To recoup costs, providers have been limiting the rewards they are prepared to offer.

Tesco Bank has dropped the points offered on non-Tesco spending from one point per £4 to one point per £8, which means £100 now earns just 12.5 points instead of 25 points, although it still offers 125 points per £100 spent in store.

High interest rates

Reward cards are also known for charging above average interest rates on purchases.

According to Moneyfacts, cards from Burtons, Evans, Dorothy Perkins, Outfit and Wallis charge 29.9% APR while paying 2 points for every £1 spent in store and 1 point on £1 on spending elsewhere.

“Consumers need to rack up 500 points to get a £5 voucher, which could mean spending up to £500 on the card, at an interest rate that is certainly more than the 1% they might gain in vouchers,” said Springall.

Frequent flyer cards

The analysis also criticised some air mile cards, which require customers to spend significant sums to build up enough for a flight.

The TSB Avios American Express Card will net users one point per £1 but the TSB Avios Mastercard offers one point per £5 meaning shoppers would need to spend £400 more on the MasterCard to earn the same 100 points.

“All in all, it seems shoppers will have to be savvy in how they spend if they want to make the most of the reward scheme, and they must make sure to repay their debt on time so the interest doesn’t erode any benefits gained,” said Springall.