Christmas money Best credit cards for Christmas gifts

Christmas Sales

Christmas can be an expensive time for families, we show you the best 0% deals to help you spread the costs over the year, as well as the best cashback deals to help you make money on your spend this Christmas and New Year sales shopping.

Want to spread the cost of Christmas?

Best card: 0%-on-purchases credit card

Who they're good for: These credit cards charge no interest on new purchases for up to 16 months, so can be useful to spread the cost of large purchases over a year.

Best deals: Tesco Bank offers a market-leading 16-month 0% deal on new purchases. Deals of 15 months are also available from Which? Recommended Provider Marks and Spencer and Halifax. See our full 0%-on-purchases credit card table for further information.

Things to watch: The 0% deal on purchases usually starts on the date the card is issued and may not coincide with your usual repayment date. Make a note of the date your 0% deal runs out to avoid incurring interest in the final month. Always set up a direct debit for at least the minimum payment - if you miss a payment, you may lose the whole 0% deal.

How to make money from your Christmas shopping

Best card: Cashback and reward credit cards

Who they're good for: Consumers who pay off their bill in full every month. You receive a percentage of your shopping bill back, either as cash knocked off your bill once a year or as vouchers to spend in-store.

Best deals for big-spenders: For big-spenders, American Express offers a introductory rate of 5% for the first three months on all spend capped at £100, followed by a standard rate of 1.25%. 

Barclaycard have a new Cashback card that offers up to 6% on your top five monthly purchases for the first three months capped at £120. After this you receive 2% on the top five purchases and you get 0.5% on all other spend. To receive the higher cashback rate you need to use your card at least 15 times each month.    

Best deals (cards with no annual fee): Capital One offers the best cashback deal with no annual fee followed by cards from Virgin and Creation. These cards pay a slightly less generous reward than the cards mentioned above. 

See the full cashback credit cards table for further information.

Retailer's credit cards

If you do a lot of your shopping with one retailer, you could earn higher rewards with a retailer-branded reward card. 

For example, BHS pays 5% rewards on in-store shopping, and 1% on shopping elsewhere including double the reward rate on your first purchase. House of Fraser pays 3% reward on purchases from its website, 3% in-store and 1% elsewhere. 

See our reward card reviews for details of more retailer cards.

Things to watch: Interest rates (APRs) tend to be high on cashback and reward cards, so make sure you pay off your bill in full every month, otherwise you are effectively loosing the benefit of any cashback earned.

Tip for highly organised card users: If you currently pay off your bill in full every month, you could earn a higher cashback rate by building your own deal. Step one is to take out a 0%-on-purchases credit card and set up a direct debit for the minimum monthly repayment.

Each month, put the rest of the money you would have used to pay off your monthly credit card bill into a Best Rate instant-access savings account instead. 

A month before your 0% deal expires, take the money out of the savings account and repay the outstanding balance on the credit card. You'll have paid no interest on the credit card, and will have earned interest on your savings.

Still paying off last Christmas?

Best card: Balance transfer credit card

Who they're good for: People with existing debt who are likely to pay off the bill within the 0% period or who are willing to switch again. These cards can be a good way to ‘park’ some debt, allowing you to concentrate on repaying other, more expensive debts.

Best deals: 22 and 23-month 0% deals are currently available from Barclaycard, Tesco, Natwest/RBS and Halifax. See the full 0% balance transfer table for more cards and to apply now.

Things to watch: The 0% deal on balance transfer cards usually starts on the date the card is issued, so make your transfer as soon as you get the card in order to maximise your 0% period. Also, balance transfer fees vary and can reach over 3% - make sure you know how much you're paying before you switch.

Alternative solution: Free, independent debt advice. If you're still repaying your credit card bill from last Christmas, you could benefit from free debt advice from an organisation like National Debtline or the Consumer Credit Counselling Service (CCCS). See our guide Dealing with debt for contact details.

More on this...

Which? works for you