Make A Mint From Credit Cards!

Yes, really! Careful users can gain free flights, cheaper petrol, discounts and shopping vouchers - we show you how.

It's that time of year when we're all feeling poor - yes, Christmas is here again! If your wallet's suffering, just keep repeating the mantra "It's the thought that counts"! However much we try to economise at Christmas, many of us will fall foul of overspending at least a little. One way to cope is to look at how you could save money elsewhere; why not check out our tips to save cash?

But if you're the kind of person that always pay bills on time, never leaves an outstanding balance on a credit card and generally consider yourself quite financially disciplined, why not make the most of your prudence? There are a number of credit cards out there offering all manner of free gifts, from free flights to free gadgets - you just need to choose the one that appeals to you most!

By simply moving the majority of your spending each month to a credit card, rather than debit card or cash, you can receive gifts, collect points that can be exchanged for all manner of goodies or even earn gift vouchers for your favourite shop. Or you could always plump for good old cash!

Shopping & Petrol

For example, if you regularly shop at Asda, by taking out its credit card you could be quids in. For a start, you earn 1 point for every £2 spent, and 100 points can be traded in for a £1 voucher. You'll also save 2p per litre of fuel purchased at Asda petrol stations. What's more, by spending £50 or more at Asda.com with the card you can get your groceries delivered, for free (saving £3.99 each time). Assuming you spend £100 a week on delivered groceries and own a car with a 50l fuel tank that you fill up weekly, you could save over £285 a year - that's £207 on grocery delivery costs, £52 on petrol, and have earned yourself £26 in vouchers. And that's not even including spending outside Asda. Not bad for simply choosing to pay with a different card!

Alternatively, if you like a spot of retail therapy, picking the Debenhams or Marks & Spencer cards mean you can earn loyalty points on your spending that can be exchanged for gift vouchers, to be spent in store.

Travel

If you're a keen traveller, pick a card such as the BMIbaby credit card. You get a free return flight anywhere on its network with your first purchase, and if you spend at least £5k a year (around £417 a month) on the card you'll earn another free flight.

Gadgets

If you're keen on gadgets, apply for the Sony card and you'll get a free, Sony 512MB flash memory MP3 walkman, when you first use the card. Plus, you can earn Pulsebeat points with your spending, which can be exchanged for CDs, DVDs and other gadgets. And the Tesco card earns Clubcard points which can be used to pay for electricals at Tesco.com.

So what's the catch? After all, credit card companies are not generally in the habit of giving things away for free. And indeed they're not - they offer these incentives in the hope you'll forget to pay off your balance each month and have to pay them lots of interest. What's more, with typical APRs of over 15%, that could be a hefty sum indeed! But if you always pay off your card's balance on time, who really needs to care what the APR is? By setting up a direct debit to pay off your balance automatically, and in full each month, and keeping your account in credit you can earn the freebies and know you won't fall foul of the charges.

So here's a round up of some of the best deals on offer at the moment (note that I haven't included cashback cards - they're an article in themselves!).

Credit cards offering freebies

It's worth noting that the majority of these cards are credit cards (i.e. they can be used anywhere) and so give you the opportunity to rack up points more quickly.

Store Cards

You can also apply for store cards; payment cards that can only be used in one store, or other stores associated within the same group (such as the Warehouse card above).

Regular readers will know that we at The Fool are not terribly fond of store cards (indeed we call them the Devil's debt!) as they are renowned for having shockingly high interest rates. Typical APRs of over 25% are common (29.9% from Warehouse) with one even breaking the 30% barrier - incredible in an age where you can get 0% credit cards and the base rate is 5%! It's therefore not surprising that store cards have been the focus of an investigation by the Competition Commission, whose report released earlier this year included the findings that APRs are on average 10-20% too high, and that those with APRs of more than 25% should indicate to their cardholders that cheaper credit can be found elsewhere.

However, store cards often offer good deals, such as 10% off your first shop and a variety of discounts and invitations to special shopping events. If you are a careful and disciplined user, there is no reason why you couldn't take advantage of the deals offered - just make sure you pay off that balance on time! Alternatively, you could take out the card to take advantage of the introductory offer, then simply pay it off and cancel it.

Beware the 0% balance transfer deals!

It's also worth pointing out that although a number of the cards listed above offer 0% deals for balance transfers, you should think carefully about taking these up if you want to also earn points. Most cards employ negative payment hierarchy - meaning you could be charged interest! If you do want to transfer a balance, it's usually best to simply do so and cut up the card - and keep new spending to another card.

Finally, remember that these cards are only for the financially disciplined. If you don't think you could pay off the card in full, each month, don't even think of applying - you'd lose more in just one missed payment than you would gain. But if you always clear that balance, why not make the most of it and earn some free gifts or vouchers to spoil yourself?

Compare credit cards here at the Fool!