Wrap up fes­tive spend­ing with plas­tic power


CHRIST­MAS is less than six weeks away, so if you want to put your fes­tive spend on plas­tic it pays to take ac­tion now.

There is still time to order the right credit card for your sea­sonal pur­chases, but you do not have any time to waste.

You can choose from a vast range of credit cards of­fer­ing in­ter­est-free deals on pur­chases, or cash­back and other re­wards for your spend­ing.

How­ever, you also need to make sure you do not run up more debt than you can af­ford. Shop­pers look­ing for a card charg­ing zero in­ter­est on pur­chases now ben­e­fit from longer in­tro­duc­tory rates.

Sains­bury’s Nec­tar Pur­chase Credit Card of­fers the most gen­er­ous in­ter­est-free pe­riod at a record 31 months, or more than two-and-a-half years, ac­cord­ing to new re­search from fi­nan­cial in­for­ma­tion busi­ness De­faqto.

This means you would not start re­pay­ing in­ter­est on this year’s Christ­mas shop­ping un­til the sum­mer of 2020.

There are a to­tal of 210 credit cards on the mar­ket, of which half of­fer in­ter­est-free pur­chases for pe­ri­ods start­ing at three months.

Sains­bury’s Nec­tar Pur­chase leads the pack fol­lowed by an­other five of­fer­ing in­ter­est free pur­chases for 30 months: Halifax Pur­chase, Post Of­fice Money Matched, Sains­bury’s Bank Nec­tar Dual Of­fer, San­tander Ev­ery­day and Tesco Bank Club­card (Pur­chase).

Brian Brown, head of in­sight at De­faqto, said shop­pers need self-con­trol to make in­ter­est-free credit work: “Clear your bal­ance by the end of any in­tro­duc­tory pe­riod, oth­er­wise you will be charged in­ter­est on the out­stand­ing debt.”

With APRs typ­i­cally jump­ing to 18.9 per cent, this can be an ex­pen­sive shock. You could switch the debt to a zero in­ter­est bal­ance trans­fer card, but there are no guar­an­tees and it still has to be cleared one day.

In­ter­est-free deals only work if you rigidly fol­low all the terms and con­di­tions. Brown added: “If you miss a monthly pay­ment your in­ter­est-free deal could in­stantly come to an end.”

Brown said the best deals re­quire good credit scores: “Check your rat­ing be­fore ap­ply­ing. Many providers let you do this with­out af­fect­ing your credit record.”

De­faqto.com/cred­it­card al­lows you to check which cards of­fer this func­tion, as well as com­pare rates and other ben­e­fits. A cash­back card may work bet­ter for those who clear their bal­ance ev­ery month. Amer­i­can Ex­press Plat­inum Cash­back Credit Card of­fers 5 per cent back on pur­chases for three months up to a max­i­mum £125, then 1 per cent as stan­dard. Brown said: “This en­hanced in­tro­duc­tory rate may ap­peal to those who are planning to spend a lot in one month, per­haps on a new TV or the Christ­mas shop­ping.”

Asda Money’s range of cash­back cards, the NatWest/RBS Re­ward Black cards, and San­tander’s All in One and 123 cards also of­fer cash­back. Deals dif­fer slightly, but Asda Money’s Cash­back Plus re­turns £18 a year for some­one who spends £100 a month on av­er­age, ris­ing to £45 on £250 and £90 on £500 monthly spend­ing, De­faqto fig­ures show. Shop­pers may be tempted to take out store cards as many of­fer an ini­tial dis­count on first us­age, worth up to 10 to 15 per cent.

Mon­ey­comms.co.uk per­sonal fi­nance ex­pert Andrew Hag­ger said this can net a ma­jor sav­ing on a big-ticket item such as a sofa: “For ex­am­ple, the Top­shop store card gives you 15 per cent off your first pur­chase if you spend more than £80.”

How­ever, store cards should be han­dled with cau­tion. He added: “You should only take ad­van­tage of an ini­tial dis­count if you can re­pay your en­tire bill in one go. Oth­er­wise you may in­cur in­ter­est at up to 30 per cent.”

An­other op­tion is to take out a re­ward card of­fered by highstreet re­tail­ers. “Choose a card from a store you use reg­u­larly to get the most ben­e­fits on your fu­ture shop­ping,” Hag­ger added.

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