In little over a month, the presents will be wrapped and piled under the Christmas tree, but if you want to have the smug smile of a savvy shopper on your face, make sure you play the system.
How to make loyalty pay
Most of the big department stores and supermarkets offer their own reward schemes to encourage you to keep coming back.
Earning points for things you already buy is a no-brainer and the rewards can build up quickly. The most popular are Boots Advantage (collect four points for every £1 spent), Tesco Clubcard (one point per £1 in-store) and Nectar (two points per £1 spent), while the brand-new John Lewis loyalty card ditches the points and instead promises vouchers for free tea and cake once a month and entry into a regular prize draw.
Don't be a slave to any given store though. You can, and should, consider price first. That said, with a few tricks up your sleeve you can come out on top. For example, you should trade in your normal Clubcard vouchers for Clubcard Rewards online (rather than spending them in-store at Tesco) which boosts a £5 voucher by up to four times its value. Boots hosts several "mega points" weekends in the run up to Christmas with 1,000 extra points when you spend £50 in one go and you can earn Advantage points online via www.treatstreet.boots.com. Visit larger Boots branches to find the "extra offers" kiosks too as you can usually use your loyalty card to find further discounts on specific items.
Reward credit cards
There are also credit cards offering rewards, but you must be confident you will repay the balance in full each month because these come with high interest rates. If you're not, focus on a card with the lowest APR instead.
There are many reward cards to choose from but pick one that suits your spending habits. For regular travellers the British Airways Amex card pays one Avios point for each £1 you spend. The current sign-up bonus is 9,000 Avios when you spend £1,000 within the first three months – enough for a return flight to Berlin. Additional benefits including automatic enrolment to the British Airways Executive Club and a free companion ticket if you spend more than £20,000 a year (although you still have to cover taxes, fees and charges).
Cashback credit cards
For general spending you may prefer to earn cash rather than loyalty points linked to one retailer. Once again, the number one rule is to pay off the bill each month as they often come with high interest rates.
The American Express Platinum Cashback Card offers an impressive 5 per cent cashback on up to £2,500 of purchases in the first three months and 1.25 per cent thereafter. This equates a total of £218.75 cashback if you spent £1,000 per month during the first year, according to MoneySupermarket (although do factor in the annual fee of £25).
The new Santander 123 Cashback Card has introduced 1 per cent bonus cashback on all Amazon purchases to 31 January 2014, as well as the usual 1 per cent at all major supermarkets, 2 per cent at department stores and 3 per cent at petrol stations, National Rail and London Underground. There is an annual fee of £24 to consider, but until the end of this year, Santander will waive the fee for the first 12 months if you also hold a 123 current account (which also offers cashback on household bills and up to 3 per cent interest on your balance.
If your credit record isn't up to scratch, Capital One's Classic Extra is the only reward card available to customers trying to rebuild their rating. You earn 0.5 per cent cashback on all purchases, plus a £10 annual bonus if you pay your balance on time, but the interest rate is extremely high at 34.9 per cent so you'll need to be disciplined.
Online prices often beat the high street and retailers are increasingly getting their sales underway before Christmas, including Amazon which will offer discounts on 2,000 products during "Black Friday Deals Week" which starts tomorrow.
Avios is also offering 50 per cent more points than usual when members shop via the Avios.com eStore from 26 November to 9 December plus an introductory bonus of 500 points if you spend £50 or more on your first purchase.
To boost savings, search for discount codes on sites such as VoucherCloud, VoucherCodes and MyVoucherCodes – if you're a smartphone user, most sites offer mobile apps so that you can find instant discounts on the high street too. You can often use cashback sites on top (TopCashback and Quidco are two of the biggest) to earn a percentage when you click via their links and buy products at specific retailers.
Last year HMV , Blockbuster, Comet and Jessops went out of business and thousands of customers were lumbered with gift vouchers they couldn’t spend. The only exception is if you buy a voucher worth more than £100 with a credit card as this will mean the credit card issuer is jointly liable with the company and should refund your loss.
Christmas charity cards
Each year the Charities Advisory Trust names and shames retailers using good causes to boost sales, but actually giving little to charity. Buy your cards from charities or via www.cardaid.co.uk instead.
These allow you to put a few quid aside to spread the cost of Christmas, but most don’t offer any interest and your money is not protected by the Financial Services Compensation Scheme – you get both of these things with a high-street savings account.