The best credit cards for spending

Rachel Wait rounds up the best credit cards for your spending this year.

Spending on a credit card might not sound like the most sensible thing to do – after all, it is a form of debt. But using a credit card for purchases can actually work to your advantage.

Now I’m not talking about racking up lots and lots of debt that you know you’ll never ever be able to pay off – because I really wouldn’t recommend doing that. But if you’ve got a special holiday or another big expense to pay out for and you’re not sure how you’re going to afford it, paying on plastic can be a great way of getting round this problem.

That's all thanks to 0% on new purchases credit cards. These handy cards allow you to spend interest-free for a certain period. So you can spread out your payments, safe in the knowledge that you won't be paying out hundreds of pounds in interest (providing you pay off the debt in full before the interest-free period comes to an end).

Pick of the best

So let’s take a look at the best 0% on new purchases credit cards on the market.  

*Existing current account holders only.

Topping the charts is the Tesco Clubcard Credit Card which offers an interest-free period on purchases for 13 months. So this gives you over a year to spend on your card without worrying about the interest stacking up – not bad, hey?

You need to bear in mind that you should clear your debt before the interest-free period comes to an end, otherwise the interest rate will jump to 16.9%. If you really can’t afford to clear your balance before then, move your debt over to a 0% balance transfer credit card (be warned, there is a transfer fee of 2.9%). The Barclaycard Platinum with 17 Month BT Visa offers 17 months interest-free on all balance transfers and you can find out more in The best balance transfer card ever!

Another advantage of the Tesco Clubcard Credit Card is that you can earn Clubcard points as you spend on it. For every £4 you spend on the card anywhere in the world, you’ll collect one Clubcard point. Your credit card also doubles as a standard Clubcard so you’ll also collect points that way on all of your Tesco purchases. What's more, if you take the card out before March 3rd, you'll benefit from a bonus 500 Clubcard points!

So this is really handy if you’re a keen Tesco shopper!

On the other hand, if you prefer to shop at Sainsbury’s, the Sainsbury’s Credit Card might be more up your street. If you have a Nectar card, you can apply for this card and enjoy 12 months interest-free on all purchases – so that’s only one month less than that offered by Tesco. Unfortunately, however, the Sainsbury’s Credit Card won’t earn you Nectar points.

In for the long-term

If you are planning to do some serious spending on your credit card and you’re a little concerned about how you'll afford to pay off the balance before the interest-free period comes to an end, there is another option.

Certain credit cards offer a low rate of interest for the lifetime of the debt. So this means you won’t have to worry about getting stung by extortionate rates of interest – no matter how long it takes to clear your debt. For example, the Barclaycard Platinum Simplicity Visa offers an interest rate of 6.8% for any purchases you make!

What’s more, this rate also applies to any balance transfers you make and there's no transfer fee. Just bear in mind that the rate is variable so it could change at any time.

Earn rewards

So far I’ve only mentioned credit cards for people who won’t be able to pay off their bill in full each month. But what if you can? The good news is, credit cards can be a useful tool then too.

For example, the American Express Platinum Cashback Card offers 5% cashback in the first three months, up to £100. After that, you can earn 0.5% cashback on the first £3,501, 1% on £3,501 to £7,500, and 1.25% on £7,501 plus. So you'll be able to earn money back as you spend it!

The drawback to the card, however, is that American Express isn’t accepted everywhere. You should also ensure that you definitely do pay off the balance in full each month – otherwise you’ll be hit with an interest rate of 18.9% which will far outweigh any cashback benefits.

Alternatively, with the Capital One World Mastercard, you’ll earn 1% cashback on everything you buy. You’ll also receive a £10 bonus credit every January. Be warned though, this card comes with a £18 annual fee. So taking into account the £10 cash bonus, you’ll need to spend £800 before the fee is effectively paid for and you actually start to earn cashback.

If you’re a frequent flyer, you might prefer to collect airmiles with your credit card instead of earning cashback. With the Lloyds TSB Airmiles Duo Credit Card, you’ll be sent two credit cards – one American Express and one Mastercard. These are part of the airmiles scheme.

You’ll be sent two cards because, as I’ve just mentioned, American Express isn’t accepted everywhere, so you’ll have the Mastercard to fall back on. You’ll receive one airmile for every £10 you spend on the American Express card and one airmile for every £50 you spend on the Mastercard. Once you’ve earned enough miles, you’ll be able to use them for a flight! Find out more in Bag a free holiday with your credit card.

So, providing you choose the right credit card for your needs, spending on one really isn’t such a bad idea!

More: My favourite credit card | Eight money mistakes to avoid in 2011