Be Paid To Spend!

Although we can't find you a job where you're paid to splurge, here are several ways to earn real cash as you shop.

One thing that I've never quite grasped is the buzz that some people get from "retail therapy" or shopping for pleasure.

Personally, I dislike shopping so much that I'd prefer to spend an afternoon poking myself in the eye, rather than trawling my local shopping precinct! Happily, thanks to the wonders of the World Wide Web, I can shop via my PC, which enables me to find bargains while avoiding high-street crowds. You'll find a few of my favourite "etailers" (online retailers) and price-comparison websites here.

As well as preferring online shopping to the high street (not least because of the deep discounts that it provides), I'm also a fan of paying for everything by credit card. First, because paying by credit card provides me with valuable legal protection which I don't get if I pay by cash, cheque, debit card or other payment methods.

Under Section 75 of the Consumer Credit Act, when you buy something costing between £100 and £30,000 using a credit card, the credit-card company becomes jointly liable with the retailer if anything goes wrong. Thus, if goods fail to turn up, or arrive damaged or faulty, the card company "stands in the shoes of the supplier" and must compensate you accordingly. In particular, this legal protection is priceless when retailers and other suppliers go bust, which seems to be happening more and more these days.

The second reason why I pay for everything using my credit card (as does my wife, who is my additional cardholder) is that it actually pays me to do so. That's because I use a cashback credit card, which means that I earn an annual cash refund which is based on the level of my spending. Indeed, in July of this year, I received a cheque for £115, having spent over £1,000 a month on my Best Buy cashback credit card. In addition, I combine my cashback credit card with store loyalty cards to earn even greater rewards.

With around eighty different incentive-based credit cards to choose from, how do you find a cashback or loyalty points/rewards credit card which is best suited to your spending habits? The good news is that independent financial analyst Moneyfacts (which powers the Fool's search wizards) did the hard work for you just yesterday. Check out these two tables:

Best Buys for cashback

Card name	Cashback offer based on yearly spending	Purchase interest rate (% APR)
American Express Platinum	0.5% on first £3,500 1% on £3,501 to £10,000 1.5% on £10,001+	12.9
Egg Money MasterCard	1% on £1+, guaranteed until 31/01/07 Minimum cashback earned must be £5+	7.9
Leeds BS MasterCard	0.5% on all spending	16.9
Morgan Stanley Platinum MasterCard	Triple cashback until 01/02/07: 3% on first £2,000; 1.5% on £2,001+ Normal cashback: 1% on first £2,000; 0.5% on £2,001+	15.9
Norwich & Peterborough Visa	0.5% on first £11,999 1% on £12,000 to £25,000	14.9
Yorkshire BS Classic Visa	1% on first £2,000 0.5% on £2,001+	15.4

Best Buys for loyalty points and rewards

Card name	Reward, based on yearly spending	Purchase interest rate (% APR)
AirMiles MasterCard	AIRMILES: 1 AirMile for every £5 spent through AirMiles Travel Agency where miles have not been used in whole or part payment for booking, in addition to standard rate of 1 AirMile for every £20 of purchases.	17.9
Amazon.co.uk MasterCard	AMAZON POINTS: 1 point for every £1 spent at any Amazon website, ½ point for every £1 spent elsewhere. When you've earned 1,500 points, a £15 Amazon.co.uk voucher will be sent to you.	15.9
ASDA MasterCard	ASDA VOUCHERS: 0.5% ASDA Money Back on every £1 spent; vouchers are sent every Nov. If card used during any month, an additional reward will be received.	19.7
Co-operative Bank Dividend Visa	DIVIDEND: Dividend paid at 1p for every £1 spent in Co-op Group stores, and 1p for every £2 spent elsewhere. Dividend can be combined with Co-op store loyalty card which can earn a further 3p for every £1 spent on Co-op branded products and fresh foods, and 1p for £1 spent on all other groceries. Accumulated over 6 months and paid as vouchers in May and December. These vouchers are redeemable for cash or goods at Co-op stores.	15.9
Morgan Stanley Buy & Fly! MasterCard	TRAVEL POINTS: 200 points on first purchase and double points for first 6 months after account opening if you make a purchase before 01/01/07. One Buy and Fly! point for every £10 of purchases. Points valid for three years from when they are added to your account.	16.9
American Express Nectar	NECTAR POINTS: 4 Nectar points earned for every £1 spent in Nectar sponsors; 1 Nectar point earned for every £1 spent elsewhere.	12.9

Source: Moneyfacts

Finally, before you rush off to bag a Best Buy cashback or rewards credit card, it's crucial to understand that these are only suitable for cardholders who always pay off their monthly bills in full. That's because earning cashback of, say, 1% a year while paying interest of upwards of 1.25% a month is plain daft. If you carry over a balance on your credit card from month to month, grab a 0% balance transfer deal, which enables you to avoid interest on your plastic debts for a year or more!

More: Use the Fool to find choice credit cards, perfect personal loans and superb savings accounts!