Meet the credit card that can cut the cost of your Christmas spree
Cashback deals could save you money, if you are smart. Nargis Ahmad and Julian Knight report
Sunday 09 November 2008
You probably don't need telling that Christmas is an expensive time of year. The average Briton spends £604 on Christmas, according to Birmingham Midshires. And judging by the surge in calls to debt charities in the New Year, many people spend far more than that, much of it racked up on newly acquired credit cards. However, if you opt to use the new generation of cashback credit cards, you can at least cushion some of the financial pain of the festive period.
A cashback credit card works like this: every time you shop using your flexible friend, you will earn money back. It's much like a supermarket loyalty card, but instead of earning rewards or points you earn good old fashioned money.
For those who keep on top of their credit card payments, it's possible to earn some extra cash while doing your shopping, says Clare Francis, spokeswoman for price comparison service Moneysupermarket.com:
"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."
The cards come with a number of other perks apart from the cash, such as collecting Airmiles or reward points for the Nectar loyalty scheme. But Ms Francis warns that shoppers should remember that these cashback cards can still have a nasty sting in the tail: "The key with any cashback card is that they only make sense if you pay off the balance in full at the end of each month. Take the American Express Platinum Card for example. It pays 5 per cent cashback, but if you don't pay the debt off in full at the end of the month, the interest rate is 18.9 per cent, which in no time at all can work out to be much more expensive than the value of the cashback."
So how do you make the most out of cashback credit cards this Christmas? The first step is to think ahead. If you're keen on one then remember that it can take up to four weeks to process a new application. Credit card firms are taking extra care over who they hand their cards out to. Put simply, have a low credit score and it's more unlikely than ever that you will be able to get one. Things that can negatively impact your credit score include failing to keep up loan and other credit repayments, getting behind with your utility bills and not being on the electoral register.
Certain cards offer a higher rate of cashback but for a limited period, for example, the American Express Platinum card has a high rate of 5 per cent on the first £4,000 you spend in the first three months of the life of the card. So timing when you get your card during a period of high spending, such as Christmas and the January sales, will help to maximise cashback.
If you want a cashback card, it may be worthwhile checking out one of the cashback websites. Sites such as Topcashback, Quidco and Greasypalm will give you money if you sign up to a cashback card through their websites. You could pocket £34 for the American Express Platinum card or £20 for the Egg Money card if you go through Topcashback.co.uk, says Mike Tomkins, co-founder of the website. "You get two lots of cashback on purchases, one from the credit card and another cashback amount by shopping via a site such as ours. Shop as you would do, but you get a discount, this is free money."
However, cashback websites do have their critics. Some suggest that choice is far more limited than on the high street and the items that you want to purchase may be had for less money through seasonal retail sales or ordinary online retailers. But according to Mr Tomkins, signing up to a cashback card through a cashback website is proving popular: "People are getting the credit cards out in the run up to Christmas to do the shopping. People are definitely going for the cashback; more than double the applications are going for the cashback cards as opposed to those which don't pay anything. People are looking to save money wherever they can."
Plugging into the more austere money saving times, Abbey launched its new Essentials cashback card last week. It offers 3 per cent cash back on supermarket and petrol purchases at selected outlets for the first six months. Cashback is capped at £75 during the first six months of the card or £12.50 a month.
Returning to the stage after 20 years makes actress feel 'nauseous'
Top conservatoire offers ‘groundbreaking’ arts degree
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 3 Grandmas keep accidentally tagging themselves as Grandmaster Flash on Facebook
- 4 Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
- 5 Kanye West halts concert after two fans don't stand up - doesn't realise one is in wheelchair and the other disabled
iJobs Money & Business
£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony