Make the most of your summer spending with a cashback card

Summer is an expensive time for families as they fork out on activities and holidays to keep their children entertained, but they could generate some extra money by using a reward card for their spending, according to MoneySupermarket.

Shoppers can make big savings when considering a reward credit card for their purchases. For example, spending £1,000 a month on the American Express Platinum Card (which offers five per cent cashback on up to £2,000 of purchases in the first three months, and 1.25 per cent cashback on everything bought after three months) could gain an extra £225 cash back in a year, increasing to £375 a year when spending £2,000.

There are also a number of cards designed for shoppers who use their plastic to pay for their weekly grocery or fuel shop. The Tesco Clubcard Credit Card at 16.9 per cent APR for example offers zero per cent on balance transfers for eighteen months or zero per cent on purchases for sixteen months. In addition, points accrued from shopping and petrol are rewarded with five points for every £4 spent in Tesco or one point if spent elsewhere. NatWest's Your Points MasterCard has a slightly higher APR of 17.9 per cent but offers zero per cent on purchases for eighteen months and has a points system for every pound spent, which can be used towards flights, holidays and even on certain brands such as M&S, Boots and Amazon.

Kevin Mountford, head of banking at MoneySupermarket, said: "With the additional pressure on household wallets during the summer months, consumers could help to bring a bit of sunshine to their finances by being savvy with the plastic they use for their spending.

"For those who pay off their debt in full each month using cashback and reward cards is a no brainer, as you can benefit from a broad range of incentives on offer, including cash back, air miles and loyalty club points. It is essential you are able to pay off the full balance each month, ideally by a direct debit, to avoid getting stung by interest charges. If you don't pay off your balance in full then the interest charges will outweigh any cashback benefit, making it pointless having a cashback card.

There are a number of cards to suit different circumstances as frequent travellers may benefit more from the American Express British Airways Card which gives air mile points on spending. It offers 1,000 bonus Avios air mile points when you spend £500 in the first three months, and one point for every pound subsequently.

Kevin Mountford continued: "Those looking to use a reward card should shop around first and consider the best card for their own circumstances. If you are a regular shopper it makes sense to look at a card which gives you money off your next shop, or a frequent traveller may benefit more from a card with air mile points for example. Many schemes are tied in to certain retailers and purchase types, and if you don't use them regularly in the right place your card will become redundant. It can take seven to ten days to receive a new card so if you are planning to apply for a card for the summer holidays, you will need to apply now."

MoneySupermarket has a SmartSearch credit profiling tool to help those looking for the best credit card deals for their circumstances. The tool matches the customer's credit profile against the card they are most likely to be accepted for, but doesn't leave a footprint on their credit file.