Best cards for your 2017 holiday shopping
By Marianne Curphey
There's no getting away from it - the holiday season may be fun, but it is nearly always expensive, especially if you have children or many friends and family for whom you need to buy presents. That's not to mention co-workers, teachers, cleaners, postal delivery staff ... the list goes on.
A survey by Asda money has found that parents spend an average £150 on each child for Christmas, while a different study from VoucherCodes and the Centre of Retail Research predicts Christmas spending per UK household will average at £821.25.
Given that you likely spend far more in December than any other month, shouldn't you at least be rewarded for it?
Here's how to use cash back, perks and points to your advantage, and the cards currently on the market to help you.
choose a card, have a plan
Chris Foxton, commercial and proposition manager of credit cards at Asda, says when it comes to your festive shopping, it isn't possible to find one card that does everything - cash back, rewards and loyalty points. Therefore, it's better to think in advance about how and where you shop, and then look for a credit card.
"Shop around and get one which suits your shopping habits, so that the rewards really benefit your personal needs," Foxton says.
Credit card rewards vary depending on the card's specific scheme. For instance, some credit cards partner with airlines to award miles, some give loyalty points, which can be redeemed for a number of items and experiences, and some give loyalty points that will translate into vouchers to be redeemed at a specific store. Other cards give straight cash back for each dollar you spend.
"With a cash back card, you receive a reward every time you use it," Foxton says. "The more you use the card, the more cash back you will receive."
Best cards for your
2017 holiday shopping
Compared with December 2016, cash back and rewards cards are thin on the ground, says Andrew Hagger, founder of the money information service MoneyComms.
"There are far fewer rewards and cash back cards than there were 18 months to two years ago thanks to changes in EU law," he says.
Hagger is referring to the cap on interchange fees, which took effect in the wake of an EU ruling in 2015. The cap reduced the profits card providers could make from merchants, and meant their profits took a hit. Rather than introduce a fee on cash back cards, most providers have withdrawn these cards or scaled back the rewards.
However, there are still a few options:
- Asda Cashback suite
Asda has three cards offering cash back: the Asda Cashback card, the Cashback Plus and the Cashback Start.
The Asda Cashback card comes with no annual fee. With it, you get 1% cash back at Asda, and 0.5% back everywhere else. With the Plus, you must pay £3 per month, and the APR is higher, but the cash back offerings also are higher - 2% at Asda and 1% everywhere else.
Trying to build your credit and earn a little cash back in the process? The Start is the card for you. It has the highest APR, but no annual fee, and offers the same cash back as the original Asda Cashback card.
- M&S credit card
Hagger says the M&S credit card is one of the better deals you'll find. Its Reward Plus offer gives a £20 M&S reward voucher on your first spend, and double M&S points on all your M&S shopping for the first 12 months, making it a great card to do some hefting charging on.
- John Lewis
and Waitrose Partnership Card
The Partnership Card from John Lewis and Waitrose card gives 1 point for every £1 spent on your card at John Lewis, Waitrose and John Lewis Insurance and Foreign Currency by John Lewis Finance. Plus, earn 1 point for every £2 spent everywhere else Mastercard is accepted. Every 500 points, you earn is worth £5 in gift vouchers to spend at either John Lewis or Waitrose.
In addition, the Partnership Card is currently offering an incentive to new customers - apply for the credit card by 28 November and spend £500 by 21 January, and you'll receive a £20 John Lewis and Waitrose welcome voucher as a gift.
- Tesco Premium Credit Card
Tesco's Premium Credit Card allows users to collect 1 point for every £1 spent (£1 minimum) in Tesco and 1 point for every £4 spent (£4 minimum) outside Tesco in each purchase transaction, and you can also collect points on shopping with its ClubCard loyalty scheme.
You can also collect 5,000 bonus points if you spend £5,000 in any year. This includes purchases online and at Tesco Fuel.
- Sainsbury's Nectar Purchase card
Sainsbury's Nectar Credit Card gives 1,000 bonus points each time you spend £35 or more on Sainsbury's shopping with your credit card, up to 10 times in your first 2 months. Plus, get 2 Nectar points for every £1 you spend on Sainsbury's shopping and fuel, and 1 Nectar point for every £5 you spend elsewhere.
"American Express have attractive introductory deals - for example 5% [in rewards] in the first three months, but they are probably not an option for a lot of people and not widely accepted," Hagger says.
Don't be afraid to shuffle cards
"You would need two or three cards to get the best out of your shopping," Hagger says.
"There is not a reward or cash back card that works everywhere," Hagger says. "Asda has a couple of options applying mainly to food and petrol spending, while American Express does have a cash back card, but some retailers will not accept it."
If you do use multiple credit cards, assign different cards to specific purchases, such as one for online shopping, one for in-store purchases. With online shopping for example, one of the risks is fraud. Using a single credit card for online purchases makes it easier to spot fraudulent activity, so you can get it sorted as quickly as possible and limit any damage, Foxton says.
Don't forget to draw up a budget and keep tabs on what you are spending, says money-making and savings expert Jasmine Birtles of Money Magpie.
"Use loyalty points, voucher codes and online or seasonal special deals to make the pound in your purse go a little further," Birtles says. "On their own, loyalty points and cash back might not be a huge amount, but taken as a whole, they can be a real help, particularly at Christmas."
If you fly, then collecting Avios could be a benefit, she says.
"I collect Avios points and convert Tesco Clubcard points and I either upgrade or fund a whole airline ticket to the US that way," Birtles says.
You get other benefits besides rewards when you pay with your credit card, too.
For instance, you'll get protection if the goods cost over £100 (and less than £30,000) and they don't arrive or the retailer goes bust. If you pay by credit card and the item costs less than £100, or if you pay by debit card, your card provider can do a ‘chargeback' (which is essentially a reversal of the payment) if there's a problem.
You'll be putting a lot of holiday shopping on your cards in coming weeks. Knowing which card to use where can help you to maximize your rewards. And if something does go wrong, such as a gift getting lost in the mail, your card protections often have you covered.See related: Dodge non-sterling transaction fees on foreign websites, Avoid buyer's remorse this holiday season, How to make the most out of Black Friday and Cyber Monday
Published: 22 November 2017
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