Your best credit cards to cover the cost of Christmas spending

Did you know there are only about nine weeks until Christmas? I know! And if you are anything like me and haven’t even started buying presents, thinking about food preparations, or planned your Christmas card list yet, you’ll should start panicking now. Trouble is, although Mr Cameron et al may have announced an end to the recession, it does not necessarily mean us cash strapped families have any extra money to spend. But there is some good news, in that there are a few new credit cards on the market that are specifically geared to cover the cost of the Christmas period. Now remember, it can take up to six weeks to receive your card, so you should be thinking of applying now so that you receive your card well in time to start spending on it. Here we sort out the best of the new cards that are offering 0% interest on purchases, as well as cashback and rewards. Don’t forget, that cards offering interest-free purchases are a great way to avoid paying interest on your Christmas shopping. The length of time the 0% period will apply varies from deal to deal though, so it’s important to shop around. So who is hot in the run up to Christmas 2012?

Tesco Clubcard Credit Card is currently offering 0% on all purchases for the first 16 months, and is also offering nine months at 0% on all balance transfers (subject to a 2.9% fee) as well as access to an enhanced Tesco Clubcard rewards scheme. The APR on the card is 16.9% (variable), which is pretty standard for a card with these benefits, just make sure you pay off your balance before the 16 months are up.

Next best is the Halifax All In One card, which is offering 15 months at 0% on purchases – but is also giving nine months at 0% on all balance transfers too (subject to a 3% fee). However, their APR is more at 17.9% (variable).

If you prefer cashback credit cards then take a look at Barclaycard’s new Cashback card, which is perfect for festive shopping as it 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% on all other spending. In addition to this there is an annual ‘thank you’ bonus that boosts the cashback on your top five purchases to 4% during the month that you took out the card. One warning however, the card does come with an annual fee of £24. But unless you pay off your balance every month, when this fee is factored in, you’ll be hit with a representative APR on purchases of 24.6% (variable) and this will far outweigh any cashback you might earn.

Other great cashback cards include the American Express Platinum Cashback card, which pays 5% cashback on the first £2,000 you spend within the first three months and up to 1.25% thereafter, with double cashback of 2.5% paid during the anniversary month of taking the card each year. It too has an annual fee – this time of £25 – which makes a representative APR of 18.9% (variable). If you like rewards with your credit cards then Barclaycard has come up trumps with their new Freedom Reward Card (APR on Barclaycard’s Freedom Reward Card at 18.9% variable).This offers points on your spending which you can then put towards shopping vouchers. The card offers up to 10,500 points which is equivalent to £30 worth of vouchers if you spend up to £500 in the first three months – very easy to do in the run up to Christmas. This card also gives you double points on fuel and supermarket spending – and you can earn on point for every pound spent elsewhere. You can also earn triple points at selected retailers.

And if you use Sainsbury’s for your weekly shop, then their Nectar Credit Card will give you double Nectar points on shopping in store, online and in Sainsbury’s petrol stations for the first three months, (Sainsbury’s Nectar Credit Card comes with a representative APR of 17.9% variable). And according to the team at MoneySupermarket, this means you could potentially earn 54,600 Nectar points over the course of a year, based on a £1,000 spend, which adds up to a very worthwhile £272.50 of rewards.

But remember, like cashback cards, reward cards will only ever pay off if you clear the balance every month.

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