Five minute guide to getting more out of your plastic | Personal Finance | Finance


It capped the levies banks can charge each other for processing credit card transactions at just 0.3 per cent, leaving little margin to offer extras.

Issuers have scaled back or scrapped loyalty schemes as a result, but some still have a point to make.

CASH ON THE CARDS

The most generous cashback cards pay between 0.5 per cent and 1 per cent on all your spending, worth either 50p or £1 for each £100.

Rachel Springall, finance expert at MoneyFacts.co.uk, said American Express offers some of the leading cashback options: “Its Platinum Cashback Everyday Card pays 5 per cent cashback for the first three months, up to a maximum £100 limit.”

Thereafter you get 0.5 per cent cashback on purchases if you spend up to £5,000 a year, rising to 1 per cent on more than £5,000.

Springall said there is no annual fee but added: “Clear your balance in full each month, too, otherwise you will pay a relatively high APR of 22.9 per cent.”

The Santander All in One Credit Card combines a zero per cent introductory rate on balance transfers and purchases for 30 months with cashback benefits.

You get five welcome cashback offers worth up to 25 per cent from a range of retailers, plus 0.5 per cent on all purchases with no annual limit.

Santander’s card has a low representative APR on purchases of 15.9 per cent, but charges a £3 monthly fee.

POINTS MEAN PRIZES

A wide variety of cards let you collect points, typically at high-street stores and supermarkets.

The Tesco Bank Clubcard with Low APR charges just 5.9 per cent, and you can also collect one Clubcard point for every £4 you spend in Tesco and every £8 spent elsewhere.

Sainsbury’s Bank Purchase Credit Card offers two Nectar points for £1 spent at Sainsbury’s stores and petrol stations, and one point for every £5 spent elsewhere, with an APR of 18.9 per cent.

M&S Bank Shopping Plus offers one point per £1 spent in its stores and £5 elsewhere, again, with an APR of 18.9 per cent.

Springall said Debenhams and House of Fraser both pay three points for every £1 spent in store, but elsewhere they pay just one point on every £2: “This means you would need to spend £1,000 to qualify for 500 points and claim a £5 voucher.” Barclaycard also offers points with its Freedom Rewards credit card.

You get two points per £1 spent at selected Freedom partners, UK supermarkets and their petrol stations, and one point elsewhere, with an APR of 21.9 per cent.

Springall added: “If you do not want to carry multiple cards the free Stockard app lets you carry all your loyalty cards on your smartphone, which you can scan at the cash register.”

CARD SHARP

Andrew Hagger, personal finance expert at MoneyComms.co.uk, said the credit card rewards market is a shadow of its former self: “The EU decimated the flourishing card rewards market within a matter of months.”

Cards from Tesco, Sainsbury’s, M&S, Asda and John Lewis work best for loyal customers of these shops.

“In-store spend is rewarded at a far more attractive rate than spending elsewhere, so focus your attention on the retailers where you do most of your spending,” he said.

DJB Research personal finance expert David Black said rewards cards are only worthwhile if you repay your entire balance every month: “If you have a large existing debt, focus on getting a zero per cent introductory balance transfer card instead. You will save a lot more interest than you will earn by collecting points.”

There are still savings to be made, so long as you play your cards right.



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