Credit card Christmas wish list from Moneyextra
20 November 2006
If you intend to put the expense of Christmas on plastic, now is the time to start planning. Cheap and zero interest deals are disappearing fast. Piling on the pounds on the wrong card could leave you with a hangover well into 2007, says Moneyextra.com.
Moneyextra’s top tips for saving Christmas credit card bills:
Switch existing card debts to 0% balance transfer deals – but hurry!
Seek out 0% interest on spending deals if you are going to splash out
Get a good low interest card if you don’t pay it off every month
OR a cashback deal if you clear your bill in full
Showing off with shopping in Paris, New York or Rome? Get a fee-free flexible friend to go with you
“Your credit card is not just for Christmas, but with an average spend jumping 22 per cent to around £378 on presents, it usually gets little rest in the run up to 25th December. If you have not checked out the best deals yet, you only have a few weeks to do it.” says Robin Amlôt, Senior Editor of Moneyextra.com.
0 per cent on balance transfers - get it whilst it lasts
This time last year you could not get past the front door for 0% transfer deal junk mail. This year, they are as scarce as happy turkeys. You will have to pay a fee if you want a long ‘free’ period. If you are transferring thousands, look for a capped fee. If your debt is in the low hundreds, a competitive life time low percentage interest rate might be better.
“But do not, repeat do not, use these cards for spending. Use a better deal for spending from now on or better still paying off your debts,” warns Robin Amlôt.
Buy now at 0 per cent
If you want to spread your Christmas spend, look for a credit card that gives you an interest-free period on purchases. For example, Marks and Spencer's & More credit card offers 0 per cent on new purchases for a full 12 months and also offers loyalty points worth 0.5 per cent of your spend, which can be spent on shopping at M& S.
The Sainsbury's Bank Platinum Visa card offers 0 per cent on new purchases for 10 months, while other cards offering nine months' interest-free credit on purchases include those from Halifax, Mint, Nationwide, NatWest, and RBS. Bear in mind that the longer the 0 per cent period, the less competitive the ‘go-to’ interest rate tends to be.
Low interest – for those who don’t pay off in full
If you can't be bothered moving your money around and just sometimes fail to pay your balance off every month, look for a card with the lowest interest rate. Best buys include the Halifax Flat Rate card, which charges 5.9 per cent and Barclaycard Simplicity, which charges a flat rate of 6.8 per cent for purchases and balance transfers.
Cashback – for those who pay their bills in full
If you always pay your bills each month, consider a cashback card, which will give you a rebate on the amount you spend each time you use it.
The American Express Platinum card gives an introductory 3% cashback for the first three months. Its normal rates are 0.5% up to £3,500, 1% between £3,501 and £10,000 and 1.5% for spending of £10,001 and above. Morgan Stanley Platinum Plus promises 3% cashback to 1 February 2007 on purchases up to £2,000.
The American Express Blue credit card gives you 0.5% cashback on an annual spend up to £3,500 and 1% above that. Egg Money card - not to be confused with the ordinary Egg card - pays 1% cashback on all purchases, guaranteed until 2007, and money off purchases from Egg's retail partners.
Fee-free shopping overseas
If you are considering doing some of your Christmas shopping overseas, you may be horrified to see how the cost rises when you take into account the "exchange rate loading" applied by credit card issuers to the currency conversion rate. You can avoid paying this if you have either a Nationwide or Post Office credit card, that don't charge it at all, or - if you’re going to Europe - a Saga or Liverpool Victoria credit card.
