Credit Cards... Cashback or Interest Free???

kate_raven_smith

Hi there...

I am looking at new ways to improve my bank account and what is best.

I am very financially savvy... I am great at budgeting, never touch my overdraft and am a save save save kinda gal.

I am looking to getting a new credit card and wanted to know people's thoughts are what gives the best return... Is it having a cash back card (Have been looking at Amex Platinum) or to go for a interest free card (looking at tesco 12 months interest free) and keeping the money in a high interest ISA (looking at First Direct ISA- As I already have their current account)

Can you please advise which you think would receive a higher return

Many thanks

Katie

CannyJock

How much would you be spending on the card each month?

no_more_cards_for_me

If you spend over £3k then cashback with Amex is a good way to go.

I don't borrow and pay in full every month but will earn the £200 cashback easily over the next 12 months.

Be aware that Amex isn't accepted everywhere (i've found 2 places that don't take it so far) so you will need either cash or another card.

LeeSouthEast

The issue with 'stoozing' the cash in an ISA is twofold:

Firstly, cards that permit transfers direct to bank accounts are few and far between. Those that do, all (to my knowledge) charge around 4% as a fee. You need a 'Super Balance Transfer' card, and Tesco isn't one of them.

Secondly, putting it in an ISA is fine, just bear in mind if you need to withdraw the money to pay it back early (due to cashflow issues, unexpected account closure or any number of other reasons), then you've wasted an ISA year.

Otherwise, if the sums still add up after the fee is taken into account, go for it.

CannyJock

LeeSouthEast wrote: »

The issue with 'stoozing' the cash in an ISA is twofold:

Firstly, cards that permit transfers direct to bank accounts are few and far between. Those that do, all (to my knowledge) charge around 4% as a fee. You need a 'Super Balance Transfer' card, and Tesco isn't one of them.

Secondly, putting it in an ISA is fine, just bear in mind if you need to withdraw the money to pay it back early (due to cashflow issues, unexpected account closure or any number of other reasons), then you've wasted an ISA year.

Otherwise, if the sums still add up after the fee is taken into account, go for it.

True enough for fast stoozing, but you can slow-stooze on a 0% purchase card without any fees involved. If you don't want to raid the ISA at the end then you either take a BT fee and hope to transfer the balance elsewhere, or if you get a bit of luck you manage to grab a 0% fee deal like the Santander Zero deal and use that.

Best savings rates at the moment are 5% (for first 12 months) with Santander and A&L - used to be 6% accounts - (pay-in requirements that you can easily work around).

kate_raven_smith

Hi Guys

Thanks for the info. I wasnt going to do a Super Balance transfer, I was literally going to stash all the money that I have spent on the CC into my ISA to earn interest (with my other savings).

I would probably spent approx £500 a month on the card.

I'm rather new to this way of using a credit card to your advantage but would like to give it a go

Thanks

Katie

YorkshireBoy

kate_raven_smith wrote: »

Can you please advise which you think would receive a higher return

Plug your numbers into these calculators...

Cashback calculator

Slow stoozing calculator

...to see which will deliver the best results for you.