Whether it’s urgent home renovations that we’ve been putting off for months or school fees for the new term, there always seems to be something forcing us to dip into our hard-earned savings.
It’s a depressing affair, so why not make it that little bit easier to bare by pocketing £200 out of the deal. I'm not talking about short changing the builders or forcing your child to be ‘home schooled’ for a few months; all you need to do is change the way you pay for it.
The American Express Platinum Cashback credit card offers to repay a whopping 5% rebate on money spent within the first three months of opening the account. The offer is unfortunately limited to the first £4,000 you spend, but that still means there’s an attractive £200 up for grabs.
All you do is put that big new purchase on the Amex card, then immediately clear the debt with your savings, and that’s it.
A word of warning
This is as close to a free lunch as you can get in finance, but it’s only a good idea if:
You were going to make the purchase anyway: There’s little point in letting the lure of cash back convince you to buy something you don’t really need. You may get a 5% rebate, but you’ve still spent 95% more than you needed to.
You have the funds to clear it immediately: The Amex Platinum card comes with a hefty 18.9% APR, so it won’t take long before the interest you pay outweighs the cash you earn.
If you don’t have the funds available to you, you’ll be far better off opting for a credit card that comes with a lengthy 0% interest offer on new purchases. Your best bet here is probably the HSBC credit card, which will give you 12 months interest free.
A final note
Obviously, you need to ensure you don’t exceed your credit limit on the Amex card when making your purchase, as not only will this land you with a fine, but you will also risk voiding the cash back rebate altogether.
Similarly, you need to ensure you don’t cancel the card within the first 12 months of activating it, as this will void the rebate offer (you will only receive your cashback funds on this ‘anniversary’ date).
As we mentioned at the start, the attractive 5% rate is only available during the first three months, so it’s important that you only apply for the card near the time you plan to make that big purchase (if you were to spend £4,000 after the three month window you would earn just £50).
