As we stare into the precipice of double-dip recession you’d be forgiven for thinking, from the endless pessimistic headlines, that we about to enter an economic dark-age the like of which we have never seen before.

It is true that getting credit (on sensible terms) is proving ever more difficult for those with a bad history of credit management, but if you’ve been a ‘goody-two-shoes’ your options have never been better (I still find it crazy that I can borrow on better terms than Italy! ) Those with impeccable credit histories can now expect deals of close to 2 years for balance transfers (roughly 5 or 6 months better than the best deals we saw in the lead up to the crash). If that doesn’t suit your desire to spend and pay down you can now get combined balance transfer & purchase cards for up to 15 months (I remember when we thought 9 months was fantastic).

“…all vying to give us cash for spending with them!”

For those who just want to spend and need further tempting more and more credit card issuers are offering cash back. American Express, Capital One, Santander and others are all vying to give us cash for spending with them! No, you’ll be surprised to hear, they’re not doing this from the goodness of their Banking hearts. The credit card platforms you use for buying your goods with (Visa, MasterCard, American Express etc) all charge retailers (or more specifically the retailer’s bank) a percentage fee for right to use their platform for the shopping you have bought.

This is called an “interchange fee” and although many retailers argue that it is too high, and potentially anti-competitive, it exists (and won’t go any time soon). The actual interchange amount differs by card platform and by the retailer you are buying, but every time you make a purchase an interchange occurs. How do the retailers afford this? No prizes for guessing…but yes, you’re already paying for it!

If you use cash, debit card or a credit card without rewards you are effectively subsidising those who are claiming back interchange funded rewards. So what do you have do you get hands on this? Get a rewards card of some kind. A number of different types exist. Airmiles (like BA Avios), Points (like Nectar or Tesco Clubcard), but possibly the most transparent and easy to understand is cash back and is a market that’s alive at the moment with issuer activity.

American Express (because of the high interchange they charge retailers) have always been the leaders in this space, but last autumn we saw Capital One and Santander challenge for a slice of the market. Given that they both use MasterCard to process their payments this was a bit of a surprise. MasterCard don’t have get the interchange to challenge American Express like for like on percentage cash back (they reduced theirs whilst they were under investigation from the Office for Fair Trading), but they did have one trump card they could play – People’s understanding of American Express. MasterCard may not pay back so much, but everyone knows it is very widely accepted.

American Express tends to live in the mind of customers as a premium brand that is not widely accepted outside of big cities. It’s a brand that is so exclusive it has its own invitation only credit card (the American Express Centurion) without a credit limit – Yes, you could buy a house on it!

In Autumn 2011, Santander launched their 1-2-3 card , whilst Capital One went live with a 5% cash back card (Capital One World) in a head to head move no-doubt designed to antagonise American Express . Not wanting to lose their cash back crown American Express responded by upping their game. They revamped their cash back card to offer 2.5% for the first 3 months and 1.25% after that. On almost every measure this card was better for customers over the course of a year than the Capital One World, but it seems the good folk at American Express had overestimated the British public. Yes, it was a better credit card for most people, but to know this we’d have to read the small print and that isn’t something we are good at. On the face of it, at 5% cash back, the Capital World looked like the strongest product around.

Of course, the thing with cash back is that is really doesn’t matter what percentage you offer to hook people because it’s capped. 50% cash back sounds great, but if it’s capped at £50 then you’ll only ever get £25. This is where the 1-2-3 Card falls down too – with its £300 cap on fuel (so you’ll only ever get £9 per month).

Not to stay down for long American Express have already re-responded and the great news for consumers is that they have matched the Capital One 5% intro period with their Platinum Cashback….actually it’s slightly better even than that. Both Capital One and American Express cap the 5% cash back for the first 3 months at £100, but with Capital One you can’t earn any more in the first 3 months once you’ve spent your first £2000. With American Express you continue to earn at 1.25% once you’ve maxed out your 5% cap at £100. Yes there’s still fee of £25 which is annoying, but given that it still offers an ongoing 1.25% cash back, versus the tiered Capital One cash back which up to £6000 annual spend remains at 0.5%, it’s a great card!

And what of the usual ‘issue’ with American Express – that is, that it isn’t accepted in enough places. Well, if there ever was a problem, things have changed there. The world itself has moved on. Most high streets are no longer made up of small independents and local shops. Rightly, or wrongly; multi-national chains of identikit shops pack every high street and almost all of them accept American Express. More importantly all the big 4 supermarkets accept American Express.

So perhaps now is the time to start getting your hands on the cash back you’ve been funding for others? And who knows, with a few quid more in your pocket the recession might not seems quite so bad!

Written by : Mark is the Marketing Director at CompareandSave.com, having previously worked at a number of media agencies on various financial brands. He now splits his time between promoting CompareandSave and investigating new ways to help our readers save money. For press enquiries, please visit our Media Centre page.

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Let’s face it, Christmas can be an incredibly expensive time, and often a time that our wage packets are unable to handle. In order to prepare for your purchases over the holiday period, you might be looking to apply for a credit card.

Everyone enjoys doing their Christmas shopping in their own way; you could be incredibly organised and have everything bought and wrapped by November, but most of us do it in early December, and inevitably leave some of it until the last minute.

However, with just 35 days  until Christmas Day, you will need to start thinking about applying for your new credit card so that it arrives in time for you to use it for your Christmas shopping.

Of course, there are several different types of credit card available and some take longer than others to arrive due to the way the card application process is handled.

Some credit cards are what’s known as ‘instant decision credit cards’ and they pretty much do what they say on the tin – you apply for the card online and the credit card company comes back to you with its decision within a couple of minutes, unless they need more information from you in order to make the final decision.

Cards that don’t offer an instant decision can take around 7 calendar days to get a decision to you.

Either way, you will still need to sign a credit agreement (some issuers allow you to do this online using a digital credit agreement), and wait for the card and PIN to arrive in the post so it is important that you apply now.

Here are the application deadlines for our top eight Christmas credit cards and have been calculated on the basis that you wish to receive your cards by 5th December, for those organised Christmas shoppers or 18th December 2011, for those who like to leave their festive shopping until the last minute.

It is important that you compare the credit cards available to you before applying to make sure that you choose the one most suitable for your needs (you should only make one application for credit at a time or it will make you look like you are desperate for credit and put off prospective lenders). To ensure that you receive your Christmas credit card in time for you carry out your festive shopping you should apply in plenty of time and account for any potential problems with the application.

Types of credit cards

The way in which you plan to use your Christmas credit card, combined with your credit rating, will affect the credit card you should apply for. Listed below are definitions of the different types of credit cards:

Instant decision

Instant decision credit cards provide many applicants with the result of their application within 60 seconds online. However, these results are not always instant if you do not meet exact criteria. If it is harder for the lender to judge your application, this decision will be delayed. These can be ideal for last minute Christmas shoppers as they are more likely to arrive in the nick of time.

0% purchases

Many credit cards offer customers introductory offers and deals to persuade them to take out their credit card. One of the most common deals for new customers is 0% interest on purchases for a fixed period of time. This is an excellent Christmas credit card because it allows consumers to buy all their festive gifts without having to pay high interest payments too.

0% Balance transfer

This type of credit card is designed to help consumers reduce the cost of their outstanding debt, as they can transfer high interest balances to a cheaper card. This card should not really be used for additional borrowing, but reducing the cost of existing debts. If you are looking for a card to do Christmas shopping a 0% purchases card may be more appropriate.

If you are looking to transfer a balance from another card because your last 0% balance transfer (BT) offer has run out and you need a 0% purchase deal for this year’s Christmas shopping, you can get cards that offer both a 0% BT and 0% purchase interest free period.

Credit-builder

If you don’t have a good or excellent credit rating, you might struggle to get accepted for a standard card. Credit building credit cards are designed to help consumers improve their credit score and their ability to access more affordable credit in the future. This credit card should not really be used to borrow money – you should really just use the card to pay for things and then pay the bill off in full each month to demonstrate to future lenders that you can manage credit sensibly. If you don’t pay your bill off in full each month, you will have to pay high interest charges because the interest rates on cards for building credit are higher than standard cards.

Rewards

These cards reward their customers for spending on their credit cards. Benefits can range from air miles to High Street gift vouchers. The interest rates are usually higher on reward credit cards due to the value of the benefits cardholders can receive. Rewards credit cards are best suited to people who use their credit cards regularly but always pay off the full balance every month. If the balance isn’t paid off in full each month, the interest charged will outweigh the rewards earned.

Christmas credit card tips

• If you have opted for a 0% purchases credit card, make sure you have the ability to repay the outstanding balance before the introductory period expires or you will face interest charges on your remaining balance once the 0% period ends
• Using credit cards for purchases of between £100 and £30,000 will protect you under Section 75 of the Consumer Credit Act, meaning that if a company fails to deliver your items (if it scam you or if it goes bust) you can claim your money back from your credit card company
• Compare credit cards to make sure you are getting the best deal.

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Credit cards affiliated to a rewards scheme are increasingly popular in the UK.

A reward credit card makes it easy to earn and redeem points for great perks just by using your card for everyday purchases. Our guide outlines three of the best reasons why you should consider a credit card offering rewards.

1. Low interest rates

As well as rewards, many cards also offer great interest rates on purchases. So, when you look for the best credit cards with rewards it is also worth keeping an eye out for some great value interest rate deals.

2. Easy to earn rewards

Once you receive your credit card it is simple to start accumulating rewards. Most schemes award points for every pound that you spend on your card and some offer additional points with certain retailers or on certain goods or services.

Whether you have a Barclaycard, Egg or MBNA credit card, the way you earn rewards will be broadly the same. However, the rewards themselves could be very different. Some offer points which you can redeem from a catalogue of goods while a cash back credit card lets you earn cash simply by spending on your card (be sure to pay off your balance in full every month, especially if you don’t get a 0% purchase period, or the interest you pay will far outweigh the benefits of any rewards you earn). Other schemes offer discounts in stores or even Air Miles.

3. Benefit from great rewards

Once you have accumulated perks through spending on your rewards card you then have a choice of a number of perks, depending on your specific scheme.

Reward credit cards typically offer:

•    Air Miles or other travel benefits
•    Discounts or vouchers in specific stores or with certain retailers
•    Cash back (on a cash back reward credit card)
•    Points to redeem from a catalogue of goods, including electrical appliances and home ware
•    Discounts on associated financial products, or preferential rates

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Brits pay £182 million every day in personal interest charges on products including rewards credit cards and personal loans. It has been recently reported that the average credit card rate in the UK has now reached 18.9 per cent and so there are many British consumers paying high rates of interest on their cards.

However, you can reduce the interest you are paying on your credit card with a simple ‘balance transfer’. Plus, instant decision credit cards offer an excellent way to immediately benefit from lower interest rates.

Instant decision credit cards offer approval straight away

Thanks to the growth of the internet and improved web security, you can undertake a credit card application online. Applying through the net is easy, simple and secure and many reward credit cards and other types of plastic now offer an ‘instant decision’.

This means that you will know the outcome of your application straight away – typically within sixty seconds

Why instant decision credit cards are great for transferring a balance

Once you have been online to compare credit cards, you can then apply for your chosen card using an ‘instant decision’ service. By doing this you obtain a decision on your application straight away.  You know immediately that your application has been agreed, and on what interest rate.

As part of this process you can normally input details of any credit card balances that you would like to transfer. For example, you might have a balance on an account you use for credit card rewards that you need to switch to a lower interest rate.

If your credit card application is approved instantly, then the balance transfer process can begin immediately. This means that your balance can be switched on to the promotional interest rate within just a few days, saving you money in the process.

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There has never been a better time in recent years to compare credit cards. That is the conclusion of a new survey which has found that credit card rates in the UK have hit their highest level this century. Lender worries over increased arrears have nudged the average credit card interest rate to levels not seen since 1998.

Interest free credit cards can help you reduce your interest costs

Research has found that the average credit card rate in the UK is now 18.9 per cent; the highest level for thirteen years. Credit card rates have been increasing gradually from their average of 16.8 per cent in 2008, although rates have not been this high since February 1998 (when rates averaged 21.1 per cent.)

Consumers are being urged to compare credit cards and to take advantage of a wide range of interest free credit cards that are available. Switching balances to interest free credit cards and undertaking careful research online to compare credit cards could save you hundreds of pounds, experts say.

Credit card rate hikes mean higher payments

This recent data found that an increase in the average card rate means that if you made the minimum repayment each month on a debt of £5,000 you would pay a total of £11,372 overall.  In February 2006 (when rates were at their lowest point) you would have paid £9,012.

Lenders have increased rates on purchases, balance transfer and reward credit cards over recent months due to the continuing problems with the economy. Fears over job losses and increasing bad debts on credit cards have led to many credit card providers increasing their rates.

However, if you compare credit cards there are still many great deals to be found. Interest free credit cards offer a remarkable 18.9 per cent discount on the average UK credit card rate and could save you a significant sum.

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If you pay off your credit card balance every month and don’t have a cashback credit card, you could be missing out on some extra cash.

Cashback credit cards reward you by giving you money back on every purchase you make – usually around 1% of your spend, though special offers can temporarily bring that up to 4 to 5%. If you pay off your balance each month so as not to incur interest charges, you can make a nice little sum in a year, particularly if you use your cashback card to buy the things you would usually buy anyway.

Cashback cards, which are a specialised form of reward credit card, have been in the news recently after the recently announced takeover of Egg credit cards by Barclaycard. The takeover, which is subject to regulatory approval, should be completed by June, and Egg customers are curious as to whether it will affect the terms and conditions of their accounts.

Currently, those with the ‘Egg Card’ can get 4% cashback on purchases of iPads and iPods from Apple, and £70 cashback on RAC home insurance. Those with the ‘Egg Money Credit Card’ get cashback of 1% on spending between £500 and £20,000 per year (with a £200 limit on cashback rewards each year).

When Barclaycard took over 1.7 million UK credit card accounts in 2008, a deal that handed Barclaycard brands like Goldfish and Morgan Stanley, it created four additional accounts to ensure that all the transferred customers got the same card benefits as they had before, so that bit of news is encouraging for Egg cardholders.

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One of the places that Britons have cut back on their expenditures is travel. When budgets are tight, giving up holidays is one way that people cope financially. But, you can use credit cards to earn airline miles and trade them in on plane tickets once you have enough of them.

Here are 3 advantages of airmile credit cards:

1. Maxing out the airmiles by choosing a card for a specific airline.

Airline sponsored credit cards let you focus your accumulation of miles on one carrier. If the airline has a hub in your city, this type of card may be a good choice. Airline-specific cards give you the most control over the routes and destinations.

2. Flexibility should you choose to use “points” in other ways.

If you choose a bank-sponsored card, rather than an airline specific card, you can accumulate points toward plane tickets and you will have the flexibility of choosing an airline. In many cases, the minimum mileage required to earn plane tickets is lower.

3. Other perks are available too.

Sometimes airmiles cards come with competitive interest rates and some come with 0% balance transfer offers. Sometimes you can use store-branded cards, like Tesco’s, to rapidly accumulate points (which can be traded for airmiles) by shopping in their stores.

There are plenty of credit cards offering airmiles, and the fine print differs among them, so be sure to compare credit cards before signing up.

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Many football credit cards are reward cards that let you show your support for your favourite football club while earning rewards toward football experiences. With many of these cards, the issuer makes contributions to your favourite club whenever you use the card, at no cost to you.

Additional benefits of these cards include:

• Reward schemes, most of which offer one point per £1 spent on card purchases. Points are redeemable for special offers and merchandise.
• Most of these rewards schemes have no limit on how many points you earn.
• 0% introductory rates are competitive, whether for purchases or balance transfers.
• You get all the perks of traditional cards, including online support, paper-free statements online, fraud protection, and 24/7 customer service by phone.
• With these and similar points cards, you start receiving reward points every time you spend.
• With football credit cards, you get access to special websites where you can log in securely and redeem rewards points and access special discounts and other offers.
• Every time you pull out your football club credit card, you show your commitment to your team.

Because the agreements with each football club differ, make sure you compare credit cards before signing up to make sure you are getting the features you expect. And remember, you will maximise your rewards by paying your balance off in full every month so as not to accrue interest charges.

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Back on the 20th August, I reported on the curious story of the BA Air Miles card promotion and how the promotion had exceeded expectations, despite the BA strike problems. I questioned whether it was a case of there is no such thing as bad news, or whether other factors, such as unexpectedly strong Q2 economic growth, had played a part.

BA’s autumn sale started at the beginning of October and once again includes great promotions on the British Airways credit cards. However, the market conditions are a bit different now.

There are no strikes looming, so BA is not headline news at the moment. The US has just issued a terror alert caution to US citizens travelling to Europe advising them to be wary of crowded places.  As a considerable part of BA’s business is transatlantic flights, this may impact sales. The US economy appears to be slowing downand, with the comprehensive spending review about to take place in the UK, these factors might also apply downward pressure on BA ticket sales.

Nevertheless, one pound sterling recently bought nearly 1.6 USD, so perhaps some UK shoppers will be looking to take a trip to New York to do their Christmas shopping. The new credit card promotions do provide consumers looking to travel in the next three months with some great incentives. It will be interesting to compare the relative performance of the summer and autumn promotions. The offers this time round are once again very strong.

The BA Amex credit card offers 8,000 bonus BA Miles when you spend £500 in the first three months of card membership. It has a typical 19.9% APR variable.

The BA Amex Premium Plus card offers 18,000 bonus BA Miles when you spend £3,000 in your first three months of card membership. The Premium card has a typical APR of 19.9% p.a. (variable) on card purchases and an overall APR of 46.0% (variable), which includes a £150 membership fee.

Naturally, terms and conditions apply and the offer on both cards ends on 8th November 2010.

For consumers looking to subsidise a trip through their Christmas and winter shopping, these offers provide a useful addition and to the Air Miles cards currently available.

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The growing strength of the ‘dual hook’ cards, which combine strong 0% promotional periods on both balance transfers and purchases, has had an impact on the popularity of other card sectors.

The obvious casualty has been the straight purchases cards, which traditionally have had just a 0% promotion for new purchases. They were the favourites of the retailers, who normally offered rewards points on the purchases made with the card.

The Amex Platinum Cash back card still offers 0% on purchases for the first six months. However, it is really a rewards card as it offers 5% cash back for the first three months, up to a limit of £100 per month. Pure purchase cards are now virtually extinct.  Arguably, the current Tesco card, which offers a market leading 0% on purchases for 13 months, is still a purchases card, but it also now offers  0% on balance transfers for 9 months, so has a strong ‘dual hook’ feature.

The other, perhaps less obvious sector to be affected is the low rate card sector. Low rate cards do not offer any 0% periods, but instead offer a low rate of interest across all amounts borrowed. They can be a competitive alternative to a personal (unsecured) loan. The best in market personal loans currently offer about 7.6% typical APR (variable and usually on loan amounts exceeding £7,500), whereas the Barclaycard Simplicity card offers 6.8% typical APR (variable) on purchases and balance transfers, and the Halifax Easy Rate offers 6.9% typical APR (variable). If these cards provide a competitive alternative, why have they become less popular over the last 6-12 months?

It may be more attractive for some consumers to take out a ‘dual hook’ card with a strong 0% purchases element (e.g. 12 months), and once this period comes to an end, roll the debt over on to a strong 0% balance transfer card (e.g. 16 months). This effectively gives up to a 28 month interest-free period in which to pay back the loan amount. When compared with paying a minimum of 6.8% APR typical (variable) over the lifetime of the loan on a low rate card, the combination of strong 0% BT deals and strong ‘dual hook’ cards would seem to account for some of the decrease in popularity of the low rate cards.

When the new Consumer Credit regulations come into force on 1st February 2011, it is likely that low rate cards will become more attractive once again. In the meantime, the rise of the ‘dual hook’ cards has had an impact on different ‘other’ sectors of the credit card market.

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