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Tony Levene is a renowned financial journalist, who has previously been a columnist for Guardian Money. He has written several books, including 'Investing for Dummies' and won the ABI Lifetime Achievement award and the Headline Money award.


Credit cards

A few days ago, a £25 John Lewis gift voucher came for me in the post. It wasn't my birthday and it wasn't the star letter prize in a magazine. Instead, it came from John Lewis Partnership Card – my reward for using this piece of plastic. There was no effort – other than using this card paying for goods. 

The voucher is obviously an incentive to use this card rather than any other. Some years ago, when credit card companies bombarded people with offers, I signed up to around a dozen cards – I liked the free gifts such as expensive watches or luggage which were sent after the card's first use. So I used them just once to buy low value train tickets. Now my card – and some others – reward you for longer loyalty.

Quotation MarksCheques were due for abolition in 2018 but have now been reprieved and will
remain in use.Quotation Marks

All this has made me think about payment. I have three choices – cash, cheques, and plastic. Cash is impossible online or on the phone and is inconvenient for larger purchases. But it has advantages. If I go out for the evening with a fixed sum in my pocket, I can't overspend. And for low value items like a newspaper or ice cream, most people still pay with cash.

Cheques were due for abolition in 2018 but have now been reprieved and will remain in use - for the time being. They're still the easiest way to pay the plumber or the builder or the gardener – and to send to young relations for presents. But cheque guarantee cards have gone, in any case, few stores still accept cheques and they don't work online. And like most people, I can't recall the last time I used the guarantee.

This leaves debit and credit cards. Debit cards are good for ATM cash withdrawals – there's generally no charge in the UK – and for controlling spending. Credit cards offer flexibility – you don't need to have the money in your account at that precise moment – and a promise that if the merchant fails to perform (most usually because it is bust or fraudulent) The Consumer Credit Regulations 2011 demands card firms give you refund if you have spent £100 or more on the transaction. But some companies – often in travel or entertainment – hit credit (and sometimes debit) card payments with high “booking” or “transaction” fees, a practice under investigation by the European Union.

But the unique deal from some credit cards comes as gift vouchers or other forms of reward. These include cash rebates on your card, store vouchers, and points you can redeem against air travel. Some make donations to selected causes – ranging from charities to political parties.

Australians collect reward points much of the time – sometimes they need different cards for different stores so a recent survey from KPMG Australia [1] suggests the over 45s are most likely to hold multiple cards. But many Europeans don't bother at all – Germans are far less likely to use credit cards than debit cards or cash.

But you have to be careful with points. Some cards demand upfront annual fees and others reduce returns after a time. And if you’re not in the half of the population that always pays credit card bills in full each month (usually by direct debit), then the rewards may not compensate for the interest.

Finally, if you get points, be sure to use them. It's easy with my John Lewis vouchers – they go into my wallet for my next John Lewis or Waitrose visit. But some cards just add points on your statement. It's easy to forget them – apparently about half of us never redeem them.

If you’d like to earn yourself John Lewis and Waitrose vouchers like Tony Levene, click here to find more about partnership card™. Representative 16.9% APR variable.

This article was written by Tony Levene and any opinions are his independent view on credit cards.


Partnership card is a trading name of John Lewis Financial Services Limited.
John Lewis Financial Services Limited is incorporated in England with limited liability under Company Number 4645530. Registered Office: 8 Canada Square, London E14 5HQ.

Approval code: AC22346

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