Best credit cards this Christmas
With Brits planning to spend an average of £414 on Christmas, having the right credit card could help relieve some of the financial pressure.

Image: PA Photos
If you're worried about how you'll foot the bill in the light of government cuts and high inflation, shrewdly spending on a credit card could make things a little easier. We take you through some of the market-leading credit card deals for Christmas shopping and warn about potential pitfalls.
Best for Christmas cashback
If you're savvy, you could use a rewards credit card to earn money on your Christmas shopping. Paying 5% cashback on purchases within the first three months (limited to £100 cashback total), the American Express Platinum cashback card has long been a market leader.
After three months, you earn up to 1.25% depending on your spending. On top of rewards, it offers a six-month interest free period on new purchases.If you're savvy, you could use a rewards credit card to earn money on your Christmas shopping. Paying 5% cashback on purchases within the first three months (limited to £100 cashback total), the American Express Platinum cashback card has long been a market leader.
Alternately, you could earn other types of rewards for your spending. With the BA American Express Credit Card, you could receive 1,000 airmiles by spending more than £500 in the first three months.
What could go wrongSounds too good to be true? The reason credit card companies offer such attractive rewards is that many customers don't possess the self discipline to clear the balance in full each month.
As soon as borrowers accumulate a debt on a rewards card, they'll usually start paying interest at a hefty rate - 19.9% APR in the case of both these cards. Fail to clear the balance in full and interest payments could easily outweigh rewards, leaving your finances even more strained in the New Year.
Best for avoiding interest
Expenses almost invariably increase at this time of year so it could be worth putting your festive spending on a card with 0% purchasing power. Waiving interest for an introductory period, these cards allow borrowers to spread the cost of an item they can't currently afford.
With the Tesco Clubcard Credit Card you get 13 months interest free, reverting to 16.9% thereafter. Further, you earn one Clubcard point for every £4 spent on the card (wherever you shop, not just at Tesco). If you're a regular in the retail giant, these points could bag you future discounts on your supermarket shopping.
Elsewhere, the Barclaycard Platinum Credit Card with Purchase offers a 12-month interest free period and then charges 18.9% APR. What's more, the Barclaycard Freedom programme pays you reward money if you use the card at participating retailers including Pizza Express and Shell.
If you have a Nectar card, you could also get 12 months interest free on purchases with the Sainsbury's Credit Card. Also note this card comes with a lower 15.9% APR at the end of the introductory period.
What could go wrongCredit card providers may withdraw the 0% introductory offer if you fail to make your minimum monthly repayments or exceed your agreed credit limit, completely undermining your original intention in taking out the card.
Likewise, it could be a mistake to transfer a balance onto a card designed for purchases. Borrowers looking for a balance transfer card could be better off with one of the cards below.
Best for clearing Christmas debt
Despite our best intentions, some of us will end up overspending during the festive period.
Should this happen, you could pay off your debt more quickly by using a balance transfer card early in the New Year. Both the Barclaycard Platinum Credit Card and the MBNA Platinum Visa Credit Card offer 16-month interest free balance transfer periods. If you took out a card in the New Year, you would have well into 2012 to clear your debts.
What could go wrong?Despite the advantages of transferring a balance, you should keep an eye on the balance transfer fee. In most cases this is around 3% or £30 on a debt of £1,000.
With both 0% balance transfer and purchase credit cards, it makes sense to pay off the card in full before the interest period kicks in. For instance, Barclaycard charges 16.9% APR and MBNA 16.8%.
Santa's 75 little helpers
Even if you choose not to earn rewards or take advantage of an interest free offer, paying for your Christmas shopping with a credit card could offer extra protection on items between £100 and £30,000.
Section 75 of the Consumer Credit Act allows you to seek compensation from your credit card company if something goes awry with one of your festive purchases. This means you'd have an extra avenue if your goods weren't delivered, were faulty or not as described.
The rates and information in the above article were correct at the date of publication but may be subject to change.
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Related links
Which credit card is right for you?
Get rewarded for credit card spending
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The new credit card booby trap
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