Credit card Guide

Best credit cards for Christmas

By Hazel Cottrell
hazel.cottrell@consumerchoices.co.uk

Which are the best credit cards to spend on this Christmas? (7/10/09)

Everyone likes receiving Christmas cards from family and friends, but another type of card could save you money, or even make you money this festive season – the credit card.

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There are two ways you could benefit from getting the best credit card, as follows:

• If you’re planning to put Christmas on credit this year, you can benefit by finding the best 0% purchases deal, which can help you spread the cost.
• If you’re lucky enough to have enough cash saved up to cover your Christmas expenses, you can benefit from putting your purchases on a cashback or reward credit card.

The big event is still over two months away, but it’s never too early to start planning your Christmas finances. It can take around a month for a credit card application to be processed, so if you want the benefits of a new deal, you need to apply now.

This guide will help you pick the best credit card for your circumstances.

If you are putting Christmas on credit…

If you haven’t managed to save up enough to cover your Christmas costs this year, you might be considering borrowing to plug the gap. If so, you need to ensure you borrow at the lowest possible rate of interest.

Getting a new credit card with a 0% purchases deal could help you spread the cost of your seasonal spending. But as with any borrowing, you need to be confident that you will be able to repay your debt, ideally within the 0% purchases deal period.

Two of the best 0% purchases credit cards currently available are the Halifax credit card (www.halifax.co.uk) and the Bank of Scotland credit card (www.bankofscotland.co.uk).

Both come with a lengthy nine-month interest-free period for purchases, which would give you until around July next year to clear your festive debt, without paying any interest.

Compare 0% purchases credit cards

If you want to be rewarded for spending…

If you’ve got enough savings to cover the cost of Christmas, you can use a credit card to earn cash or other rewards every time you spend.

It must be stressed however that you will only benefit from cashback or reward credit cards if you can afford (and remember) to pay your credit card bill in full at the end of every month. Otherwise, the cost of paying interest will wipe out any gains.

If you are confident you can do this, and you have a fair credit rating, you can take your pick from a variety of cards available.

The best cashback card at present is the American Express Platinum credit card (www.americanexpress.com). With this card you will earn 5% cashback for the first three months (up to £100) and then up to 1.25% cashback afterwards.

If you fancy earning airmiles, you should check out the British Airways American Express credit card (www.americanexpress.com). You earn one airmile for virtually every £1 you spend, and you’ll get 1,000 bonus airmiles if you spend £500 in the first three months. Plus, you’ll get a free companion airline ticket if you spend £20,000 in any year and redeem your airmiles for British Airways flights.

Te be approved for either of these cards, you’ll need a good credit rating and a salary of at least £30,000. There are plenty of other cards available though, so compare reward credit cards now to see which might suit you.

Protection when spending on a credit card

There’s another advantage to buying Christmas presents on a credit card – all big purchases (worth between £100 and £30,000) are protected under section 75 of the Consumer Credit Act.

This means your credit card provider is jointly liable with the retailer. So, if something goes wrong – for example if your purchases are faulty or are undelivered or the company you bought from goes bust – you have much more chance of getting a refund.

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