If you're in great financial health and don't intend to borrow any money on plastic you could consider getting a credit card that gives you back a percentage of your spend as cash.
See our video to learn more about cashback cards or skip ahead to where we compare two of the best cashback cards: the Santander 123 Mastercard and American Express Platinum Cashback Card.
The Santander 123 card is a card that offers a lot. You can enjoy 23 months 0% interest on purchases and balance transfers, there is also no fee for a balance transfer. So you can essentially borrow for free for almost two years - provided you meet the minimum repayments.
But it's the impressive cashback rewards that has put this card on the top table of cashback cards.
1% cashback on all supermarket spending - so you'd get £1 back for every £100 you spend at Tesco, Asda, Sainsbury's, Morrisons, The Co-op, Waitrose, Marks & Spencer, Somerfield and many more. But bear in mind this is only for the first £300 you spend each month.
2% cashback at all major department stores - £2 back out of every £100 you spend at BHS, Debenhams, House of Fraser, John Lewis, Harrods, Harvey Nichols, Selfridges and many others too, but this is also limited to the first £150 you spend each month.
3% cashback at all major petrol stations and on National Rail and Transport for London travel - so £3 for every £100 spent on travel, but this spend is limited to £100 a month, so at most you'll get £3 a month back.
Using Santander's cashback calculator anyone spending £300 at a supermarket, £150 at a department store and £100 on petrol each month, could earn an estimated £108 cashback a year.
However, these benefits come with a price as the Santander card does have a £36 annual fee, unless you already have a Santander 123 current account.
The most important difference between this card and all other cashback cards, is that you get cashback on all purchases and it is not dependent on spending in any particular supermarket or department store.
This card delivers the highest cashback rate of any card on the market; an impressive 5%. However, this is limited to a spend of £2,500, so the most you can earn is £125 cashback, and this rate is only available for the first three months with the card.
But, even after your three months of 5% cashback is up you can get 1.25% cashback on all purchases. Also, for one month a year you'll get 2.5% cashback if you've spent over £10,000 in the past twelve months.
While American Express credit cards are associated with high-end spenders, the eligibility criteria are no stricter than a lot of their competitors and you certainly don't need to be a big spending millionaire to get one.
For example, the American Express Platinum Cashback Card is available to anyone:
Aged 18 or over
With a current UK bank or building society account
A permanent UK home address
A household income of at least £20,000
No history of bad debt
Who has been working for more than one year, if self employed.
The card also charges a £25 annual fee, so make sure the cashback you're getting back is more than this fee. You also need to pay off your balance in full each month or you could be charged interest which will cost you more than you've earned in cashback.