Play your credit cards right for summer
Big spenders can make their cash go further by picking the right credit card before a summer shopping spree.
Reward credit card: Earn yourself extra spending cash
Putting your holiday or garden furniture on a reward credit card can earn you extra spending cash.
But make sure you pay the balance in full every month, because interest charges will always far outweigh rewards.
For those who do want to spread out their repayments, an interest-free deal can help to avoid extra cost.
The key to making the most of reward cards is ensuring that you are only getting perks and cashback for things you will actually use. There is no point earning travel miles with an airline if you don't plan to fly anywhere.
For most people, cashback is often the most flexible way of getting perks. Spending £10,000 on an American Express Platinum cashback credit card would earn you £171 cashback, according to Moneysupermarket.
The American Express card offers 5% cashback for the first three months, with a maximum reward of £100. After this, you get 0.5% cashback on up to £3,501, 1% on spending between £3,501 and £7,500, and 1.25% cashback on spending over this amount.
This card also charges no interest on purchases for the first six months, with 19.9% thereafter.
MBNA American Express credit card has no interest-free period, but 1.5% cashback if you use it in major supermarkets and on fuel, or 0.75% elsewhere.
Amazon MasterCard has 0% on purchases for nine months and also has the equivalent of 1% cashback on spending on its website and 0.5% elsewhere. Rewards are in the form of a voucher to use on the Amazon website.
Play operates a similar scheme, but gives 2% cashback for spending on its website and 1% elsewhere. If you can't afford to pay off your balance in full every month, opt for a card with a longer interest-free period.
The best is M&S Money MasterCard, which offers 0% on purchases for 15 months. Tesco's Clubcard MasterCard offers 0% for 13 months and Sainsbury's Credit Card has 12 months.
The Tesco and M&S cards come with reward schemes as well. M&S offers 1% cashback (in the form of an M&S voucher) for spending instore and 0.5% elsewhere. Tesco offers one Clubcard point for every £4 spent. If you collect 150 points, you get a £1.50 voucher to spend at Tesco. Vouchers can be spent elsewhere, too — every £2.50 in Clubcard vouchers gives you 50 Airmiles, for example.
Someone spending £20,000 on the M&S card, rather than a credit card at the average rate of 18.32%, would save themselves a whopping £3,922 in interest payments over 15 months.
However, these credit cards need to be used with caution.
Kevin Mountford, of Money-supermarket, says: 'People must be extremely disciplined about payments and pay off their debt before the 0% period expires.
'Also, you must set up a direct debit to pay the minimum amount each month.
'Missing a payment or paying late can mean forfeiting the interest-free benefits of the card and land people with a hefty bill.'
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