Credit cards are your friends - really!!

td_007

For those who pay off their credit cards at the end of the month, the most attractive cards today are the cashback ones. Previously with higher bank rates, one could go for balance & super balance transfers and save that money in a high interest savings account. The interest gained would be more than the transfer fees and there was a tidy profit to be made. With the abysmal (read nil) interest rates of savings account today, the best way forward with credit cards is to go for cashback. With this in mind here is a strategy with a mix of cards to gain max cashback.

1. American Express: gives 5% cashback in the first 3 months (try to make big purchases) then a tiered cashback rate with 1% above total spend of £3500.

2. Citibank Shell: gives a 3% cashback on Shell fuel spend. Combine it with Shell Drives Club card (£2.50/500 points, £1=1 point) and you get effectively 3.5% cashback. Plus, get 1% cashback for all other spend (max £100/pa). Use this where Amex is not accepted.

3. Tesco clubcard credit card: gives effective 2.25% cashback when combined with Tesco clubcard for all Tesco purchases (though using the the vouchers for other rewards could give upto 4x their value). Plus, on Tesco fuel combine with clubcard & present double points offer to get 3.25% (again using vouchers for other rewards could give upto 4x their value).

4. first direct gold card: With a big spend coming up, using this card gives 0% for 12 months - which means you can manage repayment over that period. Important with this card is the mandatory min £100 balance transfer which attracts £2.50 charge. Essentially, for £2.50 you have repay for e.g. £5000 over 12 months. Not bad yeah! Ofcourse the cashback @1% would amount to £50 but if you don't have £5000 in hand to pay back at the end of the month, or a situation where the Amex is not accepted and limit on the Citi Shell will not allow £5000 spend, then a good alternative to spread it over 12 months.

5. Nationwide Gold card: for foreign transactions only - though there is now a fee, apparently due to better exchange rate provided by VISA, the difference in final costs compared to the Abbey Zero Card which charges no fees (provided by Mastercard with a poorer exchange rate) is minimal.

6. Abbey Zero Card: for foreign transactions only. In addition to Nationwide card - just in case!!

Would like any comments/ suggestions....

duggie1982

Nice post. Im sure someone will debate....

Mozette

I've got egg money, 1% cashback on everything (£200 p.a., max.). Virgin 0% for 15/16 months - paying the minimum £25 and putting the rest in an interest bearing (just about!) account. M&S 3.9% LOB, will start seriously attacking that once the Virgin card is sorted.

Just got the airmiles card with 1500 free miles as I need to go to Europe soon and that should cover it.

I agree; used properly they are brilliant!!!!

Volcane

I've got a Barclaycard Cashback Platinum that pays 0.5% cashback but 2% cashback for fuel and supermarkets. I use this along with my clubcard and hit those Tesco fiends for a double whammy!

Also hold Egg Money for 1% cashback elsewhere.

sscott5581

Halifax and Bank of scotland also have a cashback card