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Credit cards could really help this Christmas

Among a flurry of warnings by financial experts about spending too much on our credit cards this Christmas we’re also being told that spending on our credit cards could actually be rewarding.

More from Spending Money
12 November 2008

Credit cards could really help this Christmas

Credit cards could really help this Christmas

Cashback cards offer you extra cash returned to your card every time you shop.

By ‘rewarding’, analysts mean we could benefit from certain rewards which various cards are offering to entice us to spend a little more and boost their bottom line.

Every Christmas the average family spend is £604 and a huge surge in telephone calls to charities which deal in debt counselling last year has shown that a lot of that might be credit.

There’s a new type of credit card taking centre stage this year, however, and it might be worth taking advantage of.

Cashback

Cashback credit cards are one way to benefit from using credit cards instead of cash or debit cards. Cashback cards offer you extra cash returned to your card every time you shop.

Finance expert Clare Francis said: "If you do clear your balance in full, and around half of all people do, it's a good way to make a bit of extra money.

"No wonder, cashback appeals to a lot of consumers. People will be going out Christmas shopping and they will be pushing their credit cards more, so why not reap some benefits from something you do anyway."

Cashback cards only make sense if you pay off the balance every single month however, because otherwise the interest rate is guaranteed to be much more expensive than the amount of cashback you’ll accrue.

Points

Other cards allow you to collect points which you can then redeem against goods or services. The M&S Card will provide the owner with points for each pound they spend using their card and they can then cash in those points for real food and clothing in store. That’s perfect for stocking up on thermals and brussel sprouts but you could also potentially grab a few extra presents through the scheme.

Other cards also offer points schemes. The Nectar award program, for example, is associated with American Express which offers 4 nectar points for every £1 spent and 5,000 bonus points on the first £200 charged to a new card account.

Expert advice

Financial advisors are also telling consumers that if you want a casback reward card you should go through a website which specializes in them such as Quidco, Greasypalm or Topcashback because they’ll offer you bonuses for signing up with one of the major credit card companies which offers a cashback scheme.

The choice at these sites is more limited than you might find on the high street however, as they push their own partnerships.

UK consumers have been described as ‘half way to a recession’ if not closer, so abstaining from using cards all together is not advised.

They can offer protection on purchases and protection against fraud which other forms of payment don’t provide.

Add in rewards for those who clear their balance in full monthly and you’ve got a positive force for fixing the markets. The more responsible we are with our credit, the stronger our economy will become.

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Best Buy Credit Cards

Credit Cards Balance Transfers Purchases APR Representative (Variable)
Tesco ClubCard Purchases Credit Card Logo Tesco Bank Logo Tesco ClubCard Purchases Credit Card Apply
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9 months
2.9% fee
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18 months
 
16.9%
Representative Example: The annual purchase rate is 16.9% p.a (variable) so if you spend £1200 your representative apr will be 16.9% p.a (variable)
Barclaycard Platinum With BT (27 Mths) Logo Barclaycard Logo Barclaycard Platinum With BT (27 Mths) Apply
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28 months
3.5% fee
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18.9%
Representative Example: The annual purchase rate is 18.9% p.a (variable) so if you spend £1200 your representative apr will be 18.9% p.a (variable)
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