December can be an expensive month for all of us. Find out how the right credit card can help you manage your Christmas spending and possibly earn you some rewards or cashback.
If there’s one month that we all spend a bit more than usual it’s December. On top of Christmas presents, there’s decorations, food and drink and maybe a party or two. If you think you’re likely to spend a bit more than normal over the festive period, a well-chosen credit card can help you spread the cost or reward your spending.
Section 75 regulation protects all your credit card purchases costing from £100 up to £30,000. If you can't claim money back from the retailer, you can use Section 75.
If you are worried about the amount you will be spending over Christmas you might want to consider a 0% purchase credit card. This will give you a fixed period of time (up to two years or more in some cases) to repay the money you borrow interest-free. However, it’s important you clear the debt before the 0% period runs out otherwise interest charges will kick in.
Used wisely, 0% purchase credit cards can help you spread the cost of Christmas, but it’s important not to get carried away and spend more than you can realistically afford to repay.
If you already have a large credit card balance, consider a balance transfer card. These cards can also be helpful if you have an 0% purchase card that you won’t be able to repay before the interest-free period runs out.
Balance transfer credit cards let you pay off existing debt by moving the balance to a new card with a lower interest rate, often 0% if you have a good credit score. Check your eligibility now to help avoid any panic in January when the bills come in.
If you are planning to spend more than usual, but your credit score is preventing you from getting the credit card deals you want, you could try a credit building card. Work out how much you want to spend and choose a card with that limit. Stick to strict repayment plans and you could boost your credit score within the next four to six months.
Even if you are comfortable with the cost of Christmas, if you’re going to be spending a lot, it’s worth considering a card that rewards your spending.
Rewards credit cards give you something back each time you use them. This might be loyalty points, air miles, or vouchers for shops and restaurants. Choose the one with the rewards that will benefit you most.
It’s important, however, that you repay these credit cards in full every month. If you can’t afford to pay off a big bill in January, interest charges will quickly undo the benefit of your rewards.
Cashback credit cards will give you back a percentage of what you spend on the card. Some offer a bonus period for the first few months so get this in time for your Christmas shopping to get more cashback on your spending.
As with reward credit cards, it’s important to repay cashback credit cards in full every month, otherwise interest charges will wipe out your cash back payments.
Remember to always pay off your card balance in full each month if you want to avoid paying interest.
Salman is our personal finance editor with over 10 years’ experience as a journalist. He has previously written for Finder and regularly provides his expert view on financial and consumer spending issues for local and national press.