Brits are set to spend an astonishing £3.29 billion on their credit cards during the summer sales.
According to new research from Sainsbury’s Bank, bargain hunters will spend an average of £306 in the shops, with a small percentage (3%) planning to fork out £800 or more.
But while many thousands of us are willing to put up with the manic queues and parking lot mayhem in the hopes of savings, say, 20% on a nifty new purchase, there's little point if you end up paying 17% interest for it on your credit card.
So if you are planning to put a few purchases on plastic this summer, make sure you choose the card that benefits you – and not your bank.
Best card for purchases you can’t clear immediately
If you’re going to need a while to pay off those sale items, you should go for a credit card offering a lengthy 0% interest period on new purchases.
By far the best card on the market at present is the Capital One Platinum card, which charges no interest for 14 months. The problem with this card is applicants must have an extremely good credit rating to qualify.
If you aren’t confident you’ll make the grade, don’t apply and blindly hope you’ll succeed, as a failed credit card application will be noted on your credit report and further damage your rating.
Opt instead for HSBC’s credit card, which is less stringent in its requirements but still offers an impressive 12 months interest free on new purchases.
Best card for purchases you can clear immediately
If you are in the fortunate position of being able to clear all your purchases in the month you make them, then opt for a cash back credit card instead.
The American Express Platinum Cash Back card repays an impressive 5% on expenditure during the first three months (limited to £4,000), falling to 1% thereafter.
Another option is the Barclaycard Platinum with Cashback, which repays 4% on all spend (up to £30 per month) until 31st July 2008, and then 0.5% cashback (up to £30 per month) until 1st January 2010.
It’s essential to note that cashback deals, and rewards credit cards in general, are only good value for money if you meet two criteria: First, you must never accrue interest; and second, you must never allow the lure of rewards to tempt you into spending more than you planned to.
Best card for purchase you’ve already made
If you have already made a few sneaky summer purchases and put them on an interest earning credit card, you should switch your debt to a 0% balance transfer card immediately.
The best card for this is still the Virgin credit card, which charges no interest for 15 months, with a 2.98% fee.
However, if you are sure you’ll be able to pay that debt off quickly – i.e. within six months – you should opt instead for Abbey’s Zero credit card, which gives you half a year at 0% but charges no transfer fee whatsoever.
