Credit cards Updated:
There are just 51 days to go until Christmas, but have you got the right credit card to see you up to the festive period and beyond?
The season of goodwill is often an expensive one, and when used responsibly, credit cards can help ease the financial burden of Christmas, allowing us to spread the cost over the coming months. With a little bit of time and savvy, you could ensure that you pay no interest on your balance or even earn while you spend.
An ever popular option for the Christmas season is a 0% purchase card which, as the name suggests, charges no interest on purchases for a set amount of time. They allow the holders to spread the cost of their purchases and, as long as the balance is paid within the offer period, they almost act as an interest free loan.
Tesco Clubcard Credit Card -is a standout option as it offers holders 0% on purchases for 13 months, with cards received eight to 12 days after an application is accepted.
This is also a good option if you spend money at the above supermarket as you earn points as your spend money.
AA Credit Card - is a good option if you'd like to go down the 0% purchase route, as it offers an interest free period of 10 months.
Both the cards detailed also offer nine months at 0% on balance transfers so if you're paying a hefty interest rate on your current balance, you could consider moving it across meaning you can make a real effort of making a dent in your debt.
With these cards, it is of the upmost importance that your clear your balance in the introductory offer timeframe, as the underlying interest rates can be harsh.
If you only intend on using the card for your Christmas shopping, divide how much you owe after you finish your shopping by the number of months you have left to pay and arrange a direct debit for that amountevery month.
For example, a balance of £900 over 11 months would be cleared by making a monthly payment of £82.
It is sensible to arrange the payment to be taken out of your bank at a time when you know the funds will be there, after you've been paid for example, and if you can afford to pay the balance off early, you should do.
If you're already planning on using a credit card to cover some of the costs of Christmas shopping then American Express are worth a look.
American Express Platinum Cashback Card - pays 5.00% cashback on purchases for three months on spends of up to £2,000. After the initial period, the cashback rates become: 0.50% on up to £3,500 a year; 1.00% on £3,501 to £7,500 per year; and 1.25% on any spend over £7,501.
Holders will also benefit from 0% on purchases for six months so any Christmas presents will not take on any extra cost as long as you pay off the balance in the agreed time. If you do not get round to switching your card before Christmas, a switch to a 0% balance transfer card in the aftermath of the festive season could save you hundreds of pounds.
They allow holders to pay off their balance without accruing more interest. The Moneyfacts.co.uk Best Buy tables detail the most competitive 0% balance transfer cards on the market, with terms of up to 16 months.
They include offers from Barclaycard, Virgin Money, Egg and Halifax.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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