17:15 21 November 2012
With just five weeks of shopping time until Christmas, the most expensive part of the year is upon us.
However, the good news is that it's not too late to claw back some of the cash you will be spending by using a credit card that offers either cashback or rewards.
For the most part, these cards are only worth considering if you know that you will be able to clear your balance in full every month. Otherwise, the interest you are charged on your borrowing will generally outweigh the benefit of any cashback or rewards you receive.
Used correctly, however, cards of this kind can slash the cost of the festive season considerably - by paying you back. Here, we highlight the best deals available and see just how much they could cut your Christmas shopping bill.
The best cashback cards
Cashback cards reward you by paying you back a percentage of the amount you spend. Using a good cashback credit card to do your Christmas shopping this year can really help you to turn the expense on its head as a result.
And the good news is that there are some great deals available.
Barclaycard's new Cashback Card, for example, offers a market leading 6% cashback in the first three months on your top five purchases, up to a maximum value of £120.
After that it pays 2% cashback on your top five purchases and 0.5% cashback on all other spending.
In addition, there is an anniversary 'thank you' bonus every year, meaning you actually earn 4% on your top five purchases during the month that you took out the card.
Cashback is paid annually, and the card has a £24 annual fee, which pushes the card's representative APR up to24.6% (variable).
Someone spending £1,000 on Christmas this year using the new Barclaycard could earn cashback of £60.
MoneySupermarket research shows that someone spending £1,000 on Christmas this year using the new Barclaycard could earn cashback of £60.
It is not the only card that enables shoppers to make impressive savings, though.
Based on the same spend, the American Express Platinum Cashback card would still earn you cashback of £50.
It enables you to earn 5% cashback on up to £2,500 of purchases in the first three months, up to a maximum of £125, and then 1.25% cashback on everything you buy thereafter.
You also get double cashback of 2.5% for one month when you spend over £10,000 in the previous 12 months. However you will pay a variable representative APR of 18.5% - including a £25 annual fee - on any debts.
The Capital One Aspire Elite card is worth checking out because it too offers you the chance to save £50 on a £1,000 spend within the first 99 days, during which you earn 5% cashback on purchases.
The ongoing cashback rate is up to 2%, and the representative APR is 19.9%.
However, the big drawback with this card is that it comes with a massive £120 annual fee. Alternatively, you can avoid an annual fee altogether by opting for the new American Express Platinum Cashback Everyday card.
It too offers 5% cashback on spending of up to £2,000 in the first three months, meaning that Christmas shoppers spending £1,000 will get £50 back.
Thereafter, the cashback rate falls to a maximum of 1.25% on everyday purchases such as supermarket goods and petrol. The representative APR on the card is 19.9% (variable).
The best reward cards
Barclaycard's Freedom Rewards card is one of the most generous reward cards on the market.
It offers points that can be put towards shopping vouchers, with those spending £500 in the first three months earning an extra 10,500 points, which is equivalent to £30 worth of vouchers.
Double points are paid on fuel and supermarket spending, while purchases at selected retailers, including BHS and Café Rouge, come with triple points.
And once you have the 3,500 points required for a £5 voucher, this can be redeemed at a wide range of high street chains such as Marks & Spencer, Boots, TGI Friday's and Starbucks Coffee.
The card has a representative APR of 18.9% (variable), but offers an introductory 0% rate on balance transfers for the first nine months (subject to a 2.9% fee).
Other reward cards worth considering include the NatWest YourPoints World MasterCard.
Unlike most of the best reward cards, it offers 13 months at 0% on purchases as well as balance transfers (subject to a 2.9% fee).
Even if you need a few months to pay off your Christmas spending, you can still benefit from the rewards as a result.
New customers get 2,500 bonus points, while every £1 spent earns you one point.
Points can be redeemed at travel companies such as easyJet as well as retailers including Boots and Amazon, and the card has a representative APR of 17.9% (variable).
Alternative options for keen travellers include the American Express British Airways card, which gives you one Avios point for every £1 spent.
It is particularly suitable for Christmas spending because you get 9,000 bonus Avios points when you spend £1,000 in the first three months - and that alone could pay for a return flight to Berlin.
But again, holding debt on your credit card is a no-no as the card has a representative APR of 15.9% (variable).
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