You can earn up to three times more cashback on your purchases this Christmas – just by being a savvy shopper. Even better, if you use a cashback credit card to make those purchases you can boost the cash you earn even more.
Cashback credit cards are the most popular type of plastic, but they don’t all pay good rates and some limit how much cash you can earn back. But if you manage your cashback card correctly it can be a good way of getting something back from the credit card providers.
Cashback credit cards make good financial sense only if you pay off your balance in full every month. The interest you would be charged to run a balance would be much greater than any cashback earned.
Earn 5% cashback on your purchases with the Amex Moneyback card
More cashback, less interest
The good news for cashback fans is that a new online deal is your ticket to big Christmas cashback earnings. It is called PayPal Offers and it offers customers up to 17% cashback or 20% discounts on new purchases, comfortably trumping the 5% offered with the highest paying cashback credit card.
Now you could use your debit card to make your purchases but why not use a cashback credit card and earn even more when you spend? The Amex Moneyback card pays 5% cashback for the first three months, up to a maximum of £200 earned, and then up to 1.5% after that.
But you could go one better and apply for the PayPal credit card and earn 20% more PayPal Offers cashback instead.
Using this cashback card would give you as much as 20.4% in cashback (plus you get six months interest free on purchases). Whether you use the Paypal card or the Amex Moneyback card the way to work it is to pay off the balance each month from your current account and just keep racking up the cashback without incurring any interest.
Compare the best Reward and cashback credit cards here
Stretch the Christmas budget further
Another advantage of PayPal Offers is that it only takes between two weeks and three months for the cashback to reach your account, whereas most credit card deals take a full calendar year. As a final perk, all customers who sign up will be entered into a £25,000 prize draw, to be announced before Christmas.
“Every penny counts, which is why PayPal has linked up with this wide range of shops to give customers a huge variety of discounts and cashback offers,” explains PayPal’s Cristina Hoole.
“If customers shop smarter with PayPal Offers, they will find that they will be stretching their Christmas budget by saving money. On average, a family at Christmas will save or earn over £60 to spend in the New Year from buying their Christmas presents. You can even earn cashback when you buy your Christmas turkey at Tesco.”
Click here to compare credit card deals
And now for the fine print
Of course there are strings attached, most notably that the special offers are only available at ‘selected’ merchants. There are a host of household names on the list - Boots, Comet, Toys “R” Us - but it’s an annoying restriction nonetheless. For a full list of stores, click here.
Next is the fact that not all stores offer 17% cashback, in fact Skype is the only one. But there are a host of other good offers; like 7% at Harrods and 10% at Superbreak.com. There are also some impressive discounts on offer – 15% from EA Sports and £20 with Monarch Airlines caught my eye.
Taking advantage of this deal also requires a bit of ‘legwork’. First you have to set up a PayPal account and then register with the Offers site. But a spokesperson assured me there are no set up or monthly costs involved. Finally, this is just a Christmas promotion and the deals will expire between late December and early January, so you’ll have to act quite quickly.
As you can see there are a number of restrictions in place, but this is no different to the cashback credit card deals. Whether it’s attractive headline rates that soon disappear, limits on how much you can earn or restriction on where you can spend, the sad truth is all cashback deals are littered with fine print.
Get 15 months interest-free on new purchases with the Virgin card
Always be careful with cashback
In summary, this is an attractive deal, but you should still approach with caution. All cashback deals are based on the principle that ‘the more you spend, the more you save’, which of course is a dangerous one.
If you have some inevitable expenditure coming up, then getting some money back on that is a great idea. But don’t let the cashback marketing ploy lure you into spending more than you originally intended, or you’ll end up worse off than if you hadn’t even bothered.
Compare new purchase credit cards here
