What is the best credit card for Christmas shopping in 2014? Read our Christmas savings guide to learn more
Christmas can often be the most expensive time of year with families spending hundreds, if not thousands, on gifts and food, not to mention travel, decorations and ensuring the festivities run smoothly.
Before applying for a credit card to help with the Christmas spending, it’s a good idea to assess your circumstances and figure out what you hope to do.
Cashback credit cards for Christmas
If you’ve got a good credit rating and you’re able to pay off your balance on time every month, then it’s worth getting a cashback credit card for Christmas.
The spending at Christmas is usually much higher than during other times of the year, so if you are going to be making big purchases, you may as well pick up some cash in return.
Some of the best introductory cashback credit card offers last for around three months, which can be an ideal time frame for doing your Christmas shopping and making the most of the January sales.
Card Cashback Details Fee
5% 5% cashback for 3 months (up to £125)
Then 1.25% cashback
2.5% cashback spending over £10,001
3% 3% cashback (petrol, National Rail, TFL)
2% cashback at major department stores
1% cashback at major supermarkets
0.5% 0.5% cashback
Suitable for those with bad credit history
Unlimited access to your credit report
This card offers 5% cashback on all purchases in the first three months. Although this is capped at £100, you can continue to earn cashback at a rate of 0.5% up to 1.25% after the introductory period.
You get 1% cashback at all major supermarkets, 2% cashback at all major department stores and 3% cashback at all major petrol stations and on public transport tickets (National Rail and Transport for London).
This is for people who have had bad credit in the past, that also rewards them with 0.5% cashback on all purchases. On top of this, this credit card offers free credit reports and help to rebuild your credit.
0% purchase credit cards for Christmas
Cashback credit cards are great if you can afford to pay off the balance at the end of each month.
For those who can’t afford to do that, but still have a good credit history, 0% credit cards can be a better option.
If you are planning big purchases for Christmas but would like the flexibility of being able to pay it off over a longer period, then there are some 0% credit cards with interest-free periods spanning up to 18 months.
Card 0% period Details Reverts to
19 months 19 months 0% on purchases
3 months 0% balance transfers (2.9% fee)
3 months Improve your credit rating
Possibility to reduce your APR
3 months 0% on purchases
This card gives customers 0% interest on purchases for 18 months. With the right planning you can do all of your Christmas shopping in the first month and give yourself nearly a year and a half to pay it back. On top of this, you can build up Tesco points from all of your purchases (1 Tesco Clubcard point for every £4 spent in any shop).
This is a 0% credit card for people with bad credit, but not those who’ve been declared bankrupt in the past 6 years or those with multiple County Court Judgements). With this credit card you get zero interest on purchases for the first three months while also building your credit rating.
Consolidating Christmas debt with a credit card
The best balance transfer credit card offers can really help you manage your post-Christmas credit card debt.
It’s safe to say that it’s best to avoid going into the red, but the reality is that many people will have amassed debt over the Christmas period. Balance transfer credit cards, for a fee, will allow you to move your debt to a 0% credit card, allowing you to pay it off over a period up to 30 months.
Card Balance transfer Details Transfer fee
34 months 34 month 0% balance transfers
2.99% balance transfer fee
6 month 0% on purchases
25 months 25 month 0% balance transfers
Decision in 60 seconds
This is the longest 0% balance transfer credit card and has a fee of 2.99% (initially 3.5% but this will be refunded if you follow the basic terms and conditions). After the 34 months is over you’ll pay 18.9% interest on the balance.
Tesco balance transfer - no transfer fee
The Tesco Bank Clubcard Credit Card with no transfer fee is one of the cheapest ways of deferring paying back your debt. You pay nothing to transfer your balance and you have 12 months to pay back the balance before an interest rate of 18.9% is applied.
Alternatives to credit cards
Personal loans can often be a cheaper long-term option for borrowing larger amounts, if you’re planning something more expensive this Christmas. However, the monthly repayments will be fixed, unlike the flexible size of credit card repayments, so make sure you can meet these.
Sainsbury’s have led the way by offering the largest ever personal loan of £35,000 for 6.9% interest, but the cheapest loans for smaller amounts up to £10,000 are currently being offered by Zopa, with typical APRs of 3.9%.
Authorised overdrafts are typically the cheapest and least hassle way to borrow smaller amounts and allow for you to withdraw cash rather than give you purchase credit, so offer more versatile way to borrow.