The festive displays are up and the Christmas ads are already dominating TV screens – meaning it’s impossible to ignore the countdown to Christmas.
It’s the most expensive time of year for most families but if you are clever about how you spend it’s possible earn yourself a little something extra – or even a free flight – to beat the January blues.
Here are the top credit cards to spend on this year, and the ones you still have time to get before Black Friday madness hits – plus the ones to avoid at all costs.
Paddington Bear: M&S has already released its Christmas advert
Before we get stuck in to our list of the top deals, our usual health warning applies.
You MUST be disciplined about repaying if you are considering any of these cards, even the ones with seemingly long 0 per cent interest deals.
Credit cards companies only offer these rewards schemes and promotions to get you to spend more, in the hope they can earn more cash on you debt when they slap you with interest of 18 or 19 per cent.
Of course, if you are trying to clear a balance before the 0 per cent promotion ends, extra spending will make it harder.
Here are our three golden rules:
- Only apply for a card you are likely to get – the best deals on the market, including those in this round-up, are naturally going to be the most popular and receive the most applications. This means those without a good credit score probably won’t be accepted. If you apply for multiple cards in a short space of time it will worsen your chances of acceptance as lenders think you look desperate so be sensible about your choice. If you think this will apply to you, check your credit score or use an eligibility checker – find out more here [link missing].
- Set up a direct debit – even credit cards with 0 per cent promotions attached require monthly minimum repayments. If you forget to pay it means risking losing your 0 per cent deal and possibly a mark on your credit file.
- Pay more than the minimum – work out how much you need to repay before the 0 per cent deal ends. If you don’t have one, make sure you clear your balance each month – otherwise any rewards will be swallowed up by interest charges.
Top credit card deals
American Express Platinum Cashback Credit Card, takes up to 10 days from application to arrive
The American Express Platinum Cashback Credit comes with a £25 annual fee, but it pays 5 per cent cashback on spending in the first three months (capped at £125).
While there is no interest-free period on purchases, and an APR of 28.2 per cent, with Christmas presents to buy and higher food and drink spends at this time of year it could be a good time to take advantage of the introductory cashback rate.
After the first three months, you get 1 per cent on spends up to £10,000, followed by 1.25 per cent for anything beyond that.
There is an option without an annual fee – the American Express Platinum Everyday credit card that pays 5 per cent for three months (capped at £100). After that, you earn tiered cashback. You get 0.5 per cent on up to £5,000 and then 1 per cent on further spending.
The best option for you depends on how much you are likely to spend on the card and how much of it will be within the first three months. As a general rule, however, the premium card is only worth the fee if you are likely to spend more than about £9,000 each year.
This card takes up to 10 days to arrive
British Airways Amex – takes 7 to 10 days from application
If you spend £3,000 on a American Express British Airways Premium Plus credit card within three months you can currently bag yourself 25,000 Avios points. That could get you two return tickets to Milan, Munich or Nice.
Spend £10,000 in a year and you get a free companion ticket, plus the card pays 1.5 Avios per £1 spent (or 3 Avios per £1 spent with British Airways or BA Holidays).
The card costs £195 per year, but if you regularly use your credit card for work expenses and for all of your everyday spending it could be worth stumping up the cash.
If you cancel the card after four months you get a £150 refund however, meaning you only pay £45 for the 25,000 Avios points.
Alternatively, there is a free version – the American Express British Airways credit card that gives you just a 5,000 Avios bonus for spending £1,000 in the first year.
However, this card also comes without an interest-free purchase period and has an APR of 22.9 per cent.
Hilton Honours Credit Card – 5 working days from application
This is Money recently revealed the little-known Barclaycard Hilton Rewards card offers a free night’s stay at any Hilton hotel once you spend £750 within the first three months.
The card is free and it pays 2 points for every £1 you spend (you get an extra point for spends with Hilton Worldwide). You also get a bonus of 2,500 points for the first four stays with the hotel group within the first year.
The card automatically gets you Silver Elite Status. This includes perks such as free health club access and early check ins. After you spend £10,000 on the card, you make it to Gold Elite Status, which gets you complimentary breakfasts and free room upgrades.
Interest is charged at 18.9 per cent APR.
What about spreading the cost?
As a general rule, it’s better to spread the cost of Christmas by building up a cash pot during the year, but in reality this isn’t always they way it goes.
If you are planning on putting some of the cost of Christmas on credit and clear the debt bit by bit then you want to avoid using a store card or a standard credit card that charges interest at 18 or 19 per cent.
A purchase credit card won’t charge you interest on your balance for a set period, typically two years or more. This means all of your repayments go towards paying down your debt rather than clearing interest, making it quicker and cheaper to clear.
|Top deals||Purchase offer||Extras||Standard APR|
|Sainsbury’s Bank Nectar Purchase card||31 months||3 months’ 0% balance transfers, 3% fee, Nectar points for spending plus earn 1,000 Nectar points each time you use this card to spend £35 or more on Sainsbury’s shopping in first 2 months (max 10,000)||18.9%|
|Post Office Matched||30||30 months’ 0% balance transfers, 2.75% fee||18.9%|
|Santander Everyday||30||30 months’ 0% balance transfers ,2.75% fee||18.9%|
|Halifax||30 months||6 months’ 0% balance transfers made within 90 days, 3% fee||18.9%|
|Sainsbury’s Bank Dual Offer Nectar Credit Card||30 months||30 months’ 0% balance transfer if made within the first 3 months, 2.74% fee (then 3%)||18.9%|
|Tesco Bank||30 months||3 months 0% balance transfers, 2.9% fee||18.9%|
|AA Dual Credit Card||28 months||12 months 0% balance transfer if made within 3 months, 2.7% fee.||18.9%|
|Correct as of 10 November 2017|
Supermarket reward cards
Sainsbury’s Bank – Up to two weeks from application
The Sainsbury’s Bank Nectar Purchase credit card comes top of the tables for its 31-month 0 per cent interest deal on spending. Plus it pays Nectar reward points when you swipe your card.
Supermarket shopper: Most supermarkets now offer credit card deals with rewards points
You get 2 Nectar points for every £1 you spend on Sainsbury’s shopping and fuel and one point per £5 spent elsewhere. You can exchange 500 points for £2.50 to spend in store.
The standard interest rate is 18.9 per cent.
Tesco Bank – 9 days on average
The Tesco Bank Clubcard Credit card for purchases comes with a slightly shorter 0 per cent purchase deal at 30 months but its Clubcard reward scheme is one of the most generous.
It gives one Clubcard point for every £4 you spend on it in Tesco stores or on Tesco Fuel and one point for ever £8 spent elsewhere. This is in addition to the 1 point per £1 you already earn using its loyalty scheme.
One point is worth 1p if spent in-store at Tesco and 4p if redeemed using Tesco’s Clubcard rewards vouchers. You can swap points for Avios and money off Uber trips.
M&S Bank – 15 days on average
M&S has a couple of offers worth considering. Its Shopping Plus credit card has a 25-month 0 per cent purchase deal that also pays reward points for spending.
You get one point for every £1 in shops and one point per £5 elsewhere. Each point is worth 1p and after your first spend on food or clothing you get a bonus 500 points.
As a welcome bonus, we’ll also send you a 500 M&S points voucher, worth £5, to use when you spend on food, clothing or home at M&S with your new credit card.
It has also launched a more generous rewards offer on its Reward Plus credit card.
The comes with a £20 voucher on your first spend and doubles up your points on spending for the first year.
This means you get two points per £1 spent in stores. It comes with a shorter 0 per cent promotion at six months however.
Both charge interest of 18.9 per cent once their respective 0 per cent promotions end.
John Lewis/ Waitrose – apply in store to get the card the same day, otherwise up to five working days
The Partnership Reward card lets you earn points to spend in John Lewis department stores and in Waitrose.
It has no interest-free term attached though so it won’t be the right card for spreading the cost as interest is charged at 18.9 per cent.
You get a £20 voucher when you sign up, plus it pays one point for every £1 spent on the card at John Lewis and Waitrose, plus on John Lewis insurance and currency and one point for every £2 spent elsewhere.
For every 500 points you build up, you get a £5 giftcard so each point is worth 1p.
Worst offenders: Avoid catalogue credit and store cards at all costs
Store cards can be tempting with many promising discounts and freebies when you sign up.
But typically these come with hefty interest starting at around 25 per cent. If you don’t have a decent credit rating you may even be charged more.
Here are a few examples:
- Topshop: 24.9 per cent APR
- Argos: 29.9 per cent APR
- Warehouse: 29.9 per cent APR
- Very: 34.9 per cent APR
- Littlewoods: 34.9 per cent APR
- Next: 22.9 per cent APR
Watch out for Catalogue companies too.
These offer shoppers the ability to spread the cost of items such as clothes, household appliances and furniture over a period of time – usually measured in weeks – by offering them credit.
The interest often reaches 40 per cent, all for the privilege of not having to pay upfront.
JD Williams for example charges 39.9 per cent APR, Simply Be charges 24.9 per cent APR, Very charges 39.9 per cent APR.
And prices can be higher in the catalogues than can be found elsewhere.
THIS IS MONEY’S FIVE OF THE BEST CREDIT CARDS