Find out how you can enjoy rewards as well as interest-free spending with your credit card...
For some, credit cards are seen as the epitome of evil, allowing you to rack up debt that will take you years to pay off.
However, if you know how to use your credit card to your advantage, it can actually be a very rewarding way to spend. For a start, many credit cards will allow you to spend on them interest-free for several months, while others will offer rewards such as money-off vouchers for days out and holidays.
But the best bit is that some credit cards will give you interest-free spending AND rewards! Here, I’m going to reveal five credit cards that do just that.
Tesco Clubcard Credit Card
If you want to spend interest-free, it’s well worth getting your hands on the Tesco Clubcard Credit Card. That’s because it offers a market-leading 13 months interest-free on all purchases. So you can spend away, happily knowing that you won’t have to pay interest on that spending for over a year.
However, on top of that, you’ll also be able to earn Clubcard points with this credit card. For every £4 you spend anywhere in the world, you’ll earn one Clubcard point.
What’s more, your credit card also doubles as a Clubcard – so when you use your Tesco Clubcard Credit Card to pay at Tesco, you’ll also earn standard points from Clubcard. This means you’ll currently earn two points for every £1 you spend instore*. So in total, you’ll be earning nine points for every £4 you spend in Tesco itself.
These points can either be used to get money off your shopping in Tesco or can be exchanged for vouchers with other shops which you can redeem for days out, flights, trips to the cinema, restaurants, holidays, or driving lessons, to name a few. Typically, each £1 of Clubcard points is worth £4 in vouchers but only £1 in Tesco, so you get better value if you use the points outside Tesco. You can also redeem your vouchers instore but the savings are far smaller if you do this. You can find out more about the rewards on offer here.
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AA Credit Card
If the Tesco Clubcard Credit Card doesn’t tickle your fancy, the AA Credit Card might. That’s because it now offers 12 months interest-free on all purchases, including motoring and fuel. So it’s only one month behind the Tesco card.
What’s more, every time you spend on your AA Credit Card, you’ll earn reward points. For every £2 you spend, you’ll earn one point – unless you’re paying for motoring purchases, such as petrol, servicing, tyres and repairs. In this case, you’ll earn one point for every £1 you spend.
If, however, you’re an AA member, you’ll receive two points for every £1 you spend on motoring purchases, and one point for every £1 you spend everywhere else.
You can then redeem these points for a range of products and services. For example, you can redeem them for AA products, such as AA home or car insurance, or you can redeem them for motoring and travel essentials such as roof racks or child car seats. Alternatively, if you’d prefer, they can also be redeemed for days out or high street vouchers. And finally, you can also exchange your points for cold hard cash!
If you’d like to get a better idea of how many reward points you could earn, take a look at this calculator.
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American Express Platinum Cashback Credit Card
It would be wrong not to give this lovemoney.com favourite a little mention. If you’d prefer to simply earn cash back on your credit card, rather than reward points, the American Express Platinum Cashback Credit Card is well worth taking a look at.
For the first three months, it offers a highly competitive 5% cashback (up to £100) on purchases. After that point, you can earn 0.5% on the first £3,500 of spend, 1% from £3,501 to £7,500, and 1.25% from £7,501 upwards.
But the benefits don’t end there because you can now enjoy six months interest-free on all your spending, the only cashback card to offer such a benefit!
Just bear in mind that unfortunately, American Express isn’t accepted everywhere.
Barclaycard Platinum with Purchase Visa
If you have the Barclaycard Platinum with Purchase Visa in your wallet, you’ll be able to enjoy 12 months interest-free on all purchases.
However, on top of that, you can enjoy the Barclaycard Freedom reward programme. Every time you use your Barclaycard in most participating retailers, you’ll earn 1% of the purchase made as Reward Money.
You’ll then be able to use this Reward Money to pay for all or part of your purchase at selected stores. Pizza Express, nPower, Yo! Sushi, LA Fitness, Goldsmiths, Shell, F Hinds, and Flight Centre are just some of the retailers taking part in the scheme. You can view the full list here.
Natwest YourPoints World MasterCard
Finally, another option to consider is the NatWest YourPoints World MasterCard. This card offers a six-month interest-free period on purchases and you’ll earn NatWest YourPoints every time you shop.
You earn one point for every £1 you spend on the credit card and these points can then be exchanged for days out, shopping vouchers and holidays.
To give you a better idea, the table below shows you some of the things you can get with your reward points:
|
Monthly spend |
After 6 months |
After 12 months |
After 18 months |
|
£550 |
M&S £10 voucher (2,000 points) |
Hertz car hire in Lisbon (5,700 points) |
Curry’s £40 voucher (8,000 points) |
|
£700 |
Boots £20 voucher (4,000 points) |
Amazon £40 voucher (8,000 points) |
Harvey Nichols £50 voucher (10,000 points) |
|
£1,000 |
Wines: Best selling Trio (5,270 points) |
easyJet flight London to Belfast (10,600 points) |
Laurent-Perrier Brut NV Duo (14,595 points) |
|
£1,500 |
£40 theatre tokens (8,000 points) |
3 star hotel by Spanish Steps in Rome (17,100 points) |
Pampering spa day (20,200 points) |
|
£2,000 |
easyJet flight London to Paris |
Supercar racing thrill gift voucher (17,400 points) |
Short break: Madrid with 3 star hotel and British Airways flight (from 35,200 points) |
These are sample flight prices. Actual prices may vary and are subject to availability. Prices are correct as 4th March 2010.
Get stoozing
Of course, if you can afford to pay off your credit card bill each month, you may not see the point of using a card with a 0% on new purchases period. However, you can use this to your advantage by using a method known as stoozing.
Fancy making some free money just by being clever with your credit card? These are the plastic friends you need!
If you’re not too familiar with what stoozing is, take a look at The ultimate guide to stoozing. In a nutshell, the idea behind stoozing is to pay only the minimum monthly repayment on your 0% credit card each month, rather than paying the full amount. You then put the rest of the money you would have paid towards your credit card into a savings account, where it will earn you interest.
Simply do this until the interest-free deal on the credit card expires – at which point, you can use the balance held in the savings account to pay off your credit card bill in full. You’ll then get to keep all the interest you’ve earned on your savings during that period!
This can be a great little way to earn a bit of extra money – to find out how much you could earn with the American Express Platinum Cashback Credit Card, take a look at Get paid to spend interest-free.
Finally, don’t forget to ensure you always pay your credit card balance off in full before the interest-free period comes to an end. That way, you’ll avoid being hit with a hefty interest rate.
*You’ll earn one point for every £1 you spend on petrol.
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