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The top cashback credit cards for Christmas

New research from uSwitch reveals that one-in-two consumers shop with a basic credit card offering little by the way of rewards, losing out on an average of £100 a year.

With the average 2012 pay increase just 2.1% and savers barely getting 3% interest back from their deposits, now is the time to make every penny count.

But according to new uSwitch research, standard credit cards that offer no defining features continue to occupy the top slot in consumers’ wallets and are used for the whole spectrum of spending – 23% use basic credit cards to buy groceries, 25% use them for expensive or large items such as cars, TVs and jewellery and 29% use them for one-off special purchases.

With the average consumer spending £4,520 a year on their cards, our data shows that they could be earning £100 in cashback revenue – a welcome bonus, especially with Christmas rapidly approaching.

And the one-in-four consumers using their card for more expensive items have even more to gain. For example, with the average cost of a new car being £12,000, paying by cashback card could earn £150 – potentially covering the cost of road tax, a few tanks of petrol or even helping towards the car insurance costs.

Cashback cards offer ‘something for nothing’

uSwitch personal finance expert Michael Ossei says: “If you are vigilant in paying off your card balance in full every month, using a cashback card instead of your bog standard card is a no-brainer. Using a card that pays you every time you spend is a simple way to boost your finances, effectively giving you something for nothing.

“Credit card companies are very mindful of the elongated shopping lists that consumers are faced with at this time of year and are responding with an enticing range of products. As providers ‘up the ante’ with more cards and better deals, consumers will only benefit from more choice and greater value.

“With 23 cashback deals on the market, the key is to find a card that is geared towards your individual needs. Some cards are tailored towards people’s spending patterns while others are geared around people’s income. To ensure you are choosing the right card for you, read the small print and check that the card suits your financial situation and spending habits.

“You may not get a personalised Christmas card this year but a cashback card to suit your own needs is well within reach this season.”

uSwitch’s top cashback cards for Christmas

Buying up to 5 big gifts

The Barclaycard Cashback Card will give 6% back on your top five purchases as an introductory offer for the first three months. On an on-going basis you will get 2% back on your top five purchases every month and 0.5% on everything else, for an annual fee of £24.

Multiple presents to buy

For those with longer Christmas shopping lists the Amex Platinum Cashback Credit Card guarantees a flat fee of 5% for the first three months and a rate of 1.25% thereafter – which will be doubled for one month every year. There is an annual fee of £25.

Smaller spenders

If you’re not spending a great amount this year, it’s worth considering the Aqua Reward Card. The cashback offering is simple – 3% on everything and capped at £100 for the first year. It’s a great card for people with poor credit histories, but as with all cashback cards you must pay off the entire balance in full every month, otherwise the 34.9% interest rate will eat away at the benefits.

Taking care of the essentials

If Christmas shopping is the least of your worries and you just want something back from your everyday spending, the Santander 123 Credit Card could be for you. Geared towards customers with big supermarket and travel bills, it offers 1% cashback in supermarkets, 2% in department stores and 3% on petrol and trains – but only up to a maximum of £9 cashback a month. The monthly fee of £24 a year is waived for the first year if you have a Santander 123 current account.