For lots of us, the recession means cutting back this December. But if you're planning to use a credit card to spread the cost then it's time to start researching and find the best deal.
You don't want to grab the first card you qualify for and be left paying interest on costly debt come New Year.
Christmas cards
Credit cards can be a useful way to budget for the festive shopping splurge, and most will give you 56 days interest-free on purchases, allowing you to spread the cost of Christmas over more than one payslip.
If you know that you're going to clear the balance then there are even ways to earn rewards for your Christmas shopping - such as cashback.
A time for giving
There are some incredibly competitive cards out there for anyone planning to earn cashback or other perks, but you will need an excellent credit record to qualify.
American Express' Platinum cashback card pays 5% for the first three months, up to a maximum spend of £2,000. That could be a perfect way to make your Christmas shopping pay.
Once the introductory period has finished, you'll earn 0.5% on the next £3,500 you spend, 1% on the next £4,000 and 1.25% on any spending above £7,500.
Another market-leading option is the Barclaycard Cashback, offering 1% on the first £2,000 spent and 0.5% on the rest. This card also offers 0% interest on balance transfers (with a 2.5% fee), so it could help you save money on any existing debt.
Retail rewards
Do you tend to shop in one particular place? If you're an Amazon addict then the online retailer has a reward card that might suit.
Earlier this month, it launched its own rewards credit card. You earn one point for every £1 spent on Amazon.co.uk and one point for every £2 spent elsewhere.
Once you have 1,000 points, you receive a £10 Amazon voucher. The annual rate of interest levied on this card is 16.9% so it's not a good option if you won't clear your balance each month.
John Lewis junkies can benefit from a particularly generous cashback scheme. The John Lewis Partnership Card offers one point for every pound spent within its shops - which include Waitrose supermarkets - and one point for every £2 spent anywhere else.
Points mean discounts - and you'll gain £5 for every 500 points - only redeemable within Waitrose or John Lewis. Once again, there's a high rate of 16.9% so if you're planning to leave a balance on your card, the cost will quickly outweigh the benefits.
Of course, cashback and reward cards are only worth considering if you pay your credit card off each month. If not, the interest you'll pay will quickly outweigh the value of the reward.
Christmas shopping
If you know it will take you some time to clear the balance, you'll want a card with a low rate on purchases.
Tesco offers 0% on purchases for 12 months, which could really help give you time to spread the balance. Its standard rate is 16.9%, so you will want to be out of debt by the end of the introductory deal.
You should also avoid transferring existing debt onto this card as the interest-free period on balance transfers only lasts six months.
Once that's finished, you'll start paying interest on the debt you transferred and your monthly repayments will go towards paying off the purchases which are, of course, interest free for a further six months.
Alternatively, there's a moneysupermarket.com exclusive with MBNA. Its Platinum Credit Card charges 15.9% but gives users 12 months interest-free on purchases worth £100 or more. Anything less than that will be charged after six months.
Other good options include Sainsbury's credit card which has a 10-month interest-free period on purchases and balance transfers, and the Halifax All in One card - charging no interest for nine months on both purchases and transfers.
With both of those cards you pay a 3% balance transfer fee. These two deals are great if you're looking to transfer an existing debt over from another card and also want a 0% deal to help you spread the cost of Christmas.
The reason for this is that the 0% periods last for the same length of time, making it safe to use the same card for both shopping and transferring a balance.
You better watch out...
Remember, only those borrowers with the best credit scores will typically be offered these rates. Banks and building societies have become much more cautious about who they will lend to and, as a result, the leading credit cards are reserved for those with excellent credit histories.
If your credit score is less than perfect there is no point in applying for these cards - not only will your application be rejected but it could have a negative impact on your credit rating which in turn could reduce your chances of being accepted for other forms of credit.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Products or companies underlined can be applied for directly.
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