Reaping the Rewards from Credit Card Spending
CHESTER, England, November 21, 2012 /PRNewswire/ --
- Cardholders can earn extra bang for their buck using a suitable reward or cashback credit card
With Christmas fast approaching, some Brits will be turning to plastic to fund the festive period, but many will be missing out on the opportunity to earn extra bang for their buck by not using a cashback or rewards credit card, according to MoneySupermarket.
With recent research from the UK's number one comparison site revealing one in ten people (10 per cent) will be putting festive spending on a credit or store card, choosing the right card is essential.* This can often be a daunting prospect for consumers, with a vast range of incentives on offer, including cash back, air miles and loyalty club points. Matters are made more confusing by the range of introductory zero per cent APR periods now on offer from many providers, either on balance transfers or purchases. Customers need to consider how often they will use their card, and which type of reward will be most useful to them.
A cashback or reward card will bring extra benefits to those spending on their cards, effectively receiving a discount on their purchases. For example, Barclaycard's Cashback Credit Card offers up to 6 per cent cashback on all spending for the first three months up to a maximum of £120. The card doesn't have any introductory periods so is only suitable for those who will pay off the balance in full each month. Alternatively, The M&S Credit Card offers 0 per cent on purchases for the first 15 months, and offers 1 point for every £1 spent on the card in M&S stores, with 100 points being worth £1 in M&S vouchers. Spending elsewhere earns 1 point for every £2 spent. **
Kevin Mountford, head of banking at MoneySupermarket.com, said:"Every reward or cashback card offers cardholders something different. As such, anyone looking to use one of these cards needs to work out what sort of rewards suit their personal circumstances and shop around for the best deal. For a frequent flier, this might be a product that offers them air miles towards their next trip, whereas people who are planning to use their card in the shops might be better off with a card that gives them money off their next purchase. It is essential anyone thinking about taking out a reward card, considers how and where they are likely to use the card before applying. 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 may not provide such a good deal after all.
"Card offers change frequently, but we have seen some rich reward products being offered by card providers, offering cashback or retail rewards which can help cardholder make the most of their money. Customers must remember however, that any interest charged on the card will always negate the value of the rewards, even on the most generous schemes.
"Anyone thinking about taking out a reward card needs to be disciplined and ensure they are paying off the full balance each month, ideally by a direct debit, to avoid getting stung by interest charges. If you do pay off your balance each month, then interest rates are of little relevance to you. However, if you intend not to repay your debt in full each month then you should avoid reward cards and opt for a card with a lower interest rate instead. If you are looking to get a new card for your Christmas spending, and know you'll be able to pay off your balance each month, then you need to be quick as time is running out in order to receive the card in time."
Notes to Editors
* MoneySupermarket webpoll 2012
How will you cover the cost of Christmas this year?
- I'll dip into savings - 23.7%
- I'll use my disposable income - 38.1%
- I'll use my credit card/store card - 10.5%
- I'll have to use my overdraft - 3.2%
- I have been saving up all year via a savings scheme - 9.7%
- I'll borrow money from friends and/or family - 1.6%
- Unsure or don't know - 4.6%
- I don't celebrate Christmas - 8.5%
** Cashback Credit Cards
Introductory Provider Rep APR Period Benefits 6% cashback for 3 months up to GBP120 on top 5 purchases 2% cashback on top 5 monthly purchases (minimum of 15 purchases per month) 19.9% 0.50% on Barclaycard fee of Cashback (annual GBP24) N/A all other spend 5% cashback on up to GBP2,500 of purchases in the first 3 months 18.5% 1.25% cashback on everything (based on you buy American Express annual fee Double cashback of 2.5% for Platinum Cashback Card of GBP25) N/A one month every year 5% cashback up to GBP2,000 of purchases in the first 3 months 0.5% cashback on spend up to GBP3,500 1% cashback on spend between American Express GBP3,500 and GBP7,500 Platinum Cashback 1.25% cashback on spend over Everyday Card 19.9% N/A GBP7.501 1% cashback on supermarket spend 2% cashback on department store spend 22.8% 3% cashback on fuel spend, (Based on National Rail and Transport Santander annual fee for London spend up to 123 Card of GBP24) N/A GBP300 per month 5% cashback in the first 3 months up to max GBP100 0.5% cashback on all subsequent purchases up to the next GBP5,999.99 1% cashback on all purchases from GBP6,000 to GBP9,999.99 Capital One 1.25% cashback on all Aspire World Card 19.9% N/A purchases from GBP10,000 1% cashback om ASDA shopping 0% on balance 1% cashback at any ASDA petrol ASDA Money transfers for station Credit Card 14.9% 12 months 0.5% cashback everywhere else
Sourced by http://www.moneysupermarket.com 13.11.2012
Rewards Credit Cards
Provider Rep APR Introductory Period Benefits 10,500 if you spend GBP500 in the first 3 months 3 points per GBP1 spent at participating retailers 2 points per GBP1 spent on groceries and petrol 1 point for every GBP1 spent elsewhere 0% for 9 months on 3,500 points Barclaycard balance transfers = GBP10 Freedom Rewards 18.9% (2.90% fee applies) voucher Collect 10 points per GBP1 on Sainsbury's shopping in the first 3 months (capped atGBP1,000 spend per month) After the 3 months receive 4 points per GBP1 spent in Sainsbury's and 1 point per GBP5 spent elsewhere For the first 3 months you will also receive 8 points per GBP1 spent and 1 point per 1 litre spent on Sainsbury's fuel, after 3 months you will receive 0% for 6 months on 2 points per purchases GBP1 spent 0% for 15 months on and 1 point Sainsbury's Finance balance transfers per 1 litre Nectar Card Credit Card 17.9% (3% fee applies) spent. 1,000 bonus Avios points when you spend GBP500 in the first 3 months 1 Avios point for every British Airways Card 15.9% N/A pound spent 5 points for every GBP4 spent in Tesco stores 5 points for every GBP4 spent on Tesco fuel 0% on purchases for 16 1 point for months every GBP4 spent 0% on balance transfers elsewhere Tesco for 9 months (2.9% fee 150 points = GBP1.50 Clubcard Credit Card 16.9% applies) voucher Earn 1 point for every GBP1 spent at M&S and 1 point for every GBP2 spent elsewhere. Four times per year points earned will be converted into M&S Reward Vouchers which can be used as full or part payment on M&S goods. 100 points = M & S 0% for 15 months on GBP1 reward Credit Card 15.9% purchases voucher 2,500 points for all new customers 1 point received per GBP1 spent. Points can be used towards flights, holidays and on brands such as M&S, NatWest 0% for 18 months on Boots and YourPoints World MasterCard 17.9% purchases Amazon.
Sourced by http://www.moneysupermarket.com 13.11.2012
MoneySupermarket.com compares (at 30th Oct 2012)
- 129 car insurance brands and 100 home insurance brands
- 10 broadband providers and 18 energy providers
- 30 unsecured loan and 5 secured loan providers
- 62 mortgage lenders and 29 credit card providers
- 66 savings providers and 37 current account providers.
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