Credit cards Updated:
The long weekend is on its way! Extra free time means that we should make the most of it, but often that means reaching for the credit card to indulge in a bit of spending, whether you decide to hit the shops for some retail therapy or have a fun day out with the family. But spending doesn't necessarily have to leave you completely out of pocket…
If you regularly spend on your credit card, then a cashback card could put some money back in your pocket. According to our research, these cards typically offer cashback of between 0.5% and 1.00%, and that's just for starters: lucrative introductory deals can put even more cash in your pocket, with American Express currently offering the best deal with a cashback rate of 5.00% for the first three months (up to a maximum of £125) – so if you time your spending right, you can really maximise your benefits.
Alternatively, if you have some really big purchases in mind, you may want to look into 0% interest purchase cards. These cards charge absolutely no interest for a set term, which gives you some welcome breathing space in which to pay off the balance without interest adding to the cost. In even better news, the length of these initial 0% interest terms is on the rise: over the last year the average term has increased from 257 days to 278, while the longest 0% term currently available stands at an impressive 27 months!
If your credit card has already taken a hit, and you need a bit more time to try and clear the balance, then it may be worth investigating 0% interest balance transfer cards. These cards enable you to transfer existing credit card debt and then allow you to tackle the balance without interest accruing for a set term. Some of the deals on offer have extremely lengthy interest-free terms, too, with the best standing at a staggering 40 months. There are also currently 18 deals on offer that charge absolutely no transfer fees, which could make it even more cost-effective!
However, as Moneyfacts' financial expert Charlotte Nelson points out, these deals will only benefit you if you clear your balance within the necessary timeframe. "It's important that anyone considering these cards factors in any fees and future interest charges to check that it's worthwhile," she cautions. "Savvy shoppers should aim to repay the balance before the introductory deals end to avoid incurring unnecessary interest."
A similar rule applies to cashback cards. These don't tend to come with interest-free purchase terms so it's important to pay off the balance in full each month to avoid interest being applied, otherwise the cashback simply won't be worth it and could be outweighed by interest costs.
So, if you're planning a bit of a shopping spree or you want to indulge in a few extra treats this Bank Holiday, take a look at our credit card best buys to see if you can get more from your money – but remember to plan your spending and clear the balance within the necessary time frame, otherwise you may not be able to reap the full benefits of your new credit card deal.
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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