Barclaycard on Wednesday launched its Freedom scheme of rewards for eight million cardholders in a move that almost challenged its competitors. The scheme intends to offer cash in exchange of reward points earned by the card company's customers on purchases made by using Barclay's card.

As per the announcement, card users would get back cash amounting to one percent of the amount spend, which means for £100 spend the customer would be rewarded with £1 in cash.

The scheme will certainly create pressure on other card companies like Lloyds TSB, Sainsbury's Bank, M&S, and Tesco, which currently offer reward points redeemable against other purchases only.

Moreover, Barclaycard holders are now allowed to shop in 30,000 participating outlets where they can earn such cash reward.

However, only those card users who clear their dues every month in due time would be able to take benefit of this scheme. Otherwise the late and other charges would offset the rewards earned, experts commented.

Major companies, which have participated in the Freedom reward scheme, are LA Fitness, Pizza Express and Nationwide Autocentres. Though Shell is also a participant, the reward amount is restricted to 0.5 per cent only instead of one per cent available for other companies.