Twelve cracking credit cards for spending

Here are the best cards for cashback and purchases.

Borrowing to spend is not a decision you should take lightly, but if you do it right it can come at no extra cost to you. Indeed, by using credit cards to earn cashback or to delay the cost of purchases, it can actually make you better off. Today, I'll look at the top three cashback cards and the top three cards offering interest-free purchases, and round up the best of the rest.

Best cards for small purchases

The best card for making small purchases or for people with savings is a cashback card. Your purchases are effectively reduced by the cashback, as long as you pay off your card debt in full every month. Here are the top three cards at present:

Top three cashback cards

Card	Deal details	Best for...
Amex Platinum Cashback card	5% cashback for 3 months up to £2k of spend (that's max £100) 0.5% to 1.25% thereafter (no max cashback), depending on how much you spend. Not accepted everywhere.	High spenders (roughly £10k+ pa) or those making big purchases within 3 months' time.
Egg Money World card	1% up to £20k of spend (that's max £200 cashback pa). Monthly fee of £1.	Mid spenders (roughly £4,500 to £10k pa)
Barclaycard Cashback card	1% cashback on first £2k of purchases each year 0.5% on next £18k of purchases (that's max £110 cashback possible) Double cashback on contactless purchases of £10 or less	Low spenders (up to roughly £4,500 pa)

These three cards are the outstanding ones. The most important column above is Best for... As each deal is calculated differently, I've done the maths for you to show you which card is best, depending on your spending plans.

The main downside with the Amex card is that it's not as widely accepted as MasterCard or VISA. Also, watch out for the £20 dormancy fee if you make no new purchases for a year. You'll also get no cashback if you spend too little (less than £3k in a year) or if you end the agreement before the anniversary.

As for the Egg card, you must spend at least £2,400 to make it a better buy than a bog-standard 0.5% cashback card, due to the £1 monthly fee. However, you will get insurance benefits such as missed event cover, purchase protection, extended warranty and a price-matching promise, so if you go to lots of gigs and buy a lot of expensive items online, it could be a good card for you.

The Barclaycard Cashback card is best if you're a low spender, as there's no fee for this card. But whatever you do, avoid the 0% on balance transfers offer on this card or you'll be hit with a sneaky trick called negative payment hierarchy.

Best of the rest

One other notable cashback card is the Barclaycard OnePulse card, which gives you 5% cashback on Transport for London spending. An excellent card for those using London public transport, but the deal lasts till 1 December 2010 only. Make sure you read the full T&Cs.

Remember: always pay off your bill in full each month, or you'll pay more in interest than you'll earn in cashback.

Best cards for bigger purchases

If your Christmas bill is unmanageable this year, a 0% on purchases card makes more sense. You borrow for free, so you can space out your repayments at no cost to you. Just try to pay it off by next summer so you can save properly for the following Christmas!

Top three 0% on purchases deals

Listing all deals with no onerous catches

Card	Length of deal	Notes
Tesco Clubcard credit card	12 months	Earn Clubcard points on all spending.
Sainsbury's credit card	10 months	Double Nectar points on Sainsbury's shopping for two years. It's 12 months for purchases in Sainsbury's, but there's a big 'but'...
M&S credit card	10 months	Collect reward points on all spending.

Tesco's card is the top one for purchases at present, lasting 12 months. Note that the 0% deals apply to all purchases, not just to Tesco shopping. The same applies with the Sainsbury's and Marks & Spencers cards, which have deals lasting 10 months.

When you apply for these cards you're hit with all sorts of offers for other financial products. These are likely to be expensive. The idea is to hook you in with a good product and so they can more easily and cheaply sell you expensive ones.

Remember: always pay at least the minimum repayment or you'll lose your interest-free deal.

The big 'but'

In the Notes column for the Sainsbury's card I explained that, not only do you get 10 months purchases at 0% but you also get 12 months for Sainsbury's shopping. However, there's a big 'but'.

When you pay off part of the debt on the card, your Sainsbury's purchases are paid off first. This means if you buy both Sainsbury's and other goods and haven't paid off your entire card debt after 10 months, you will start paying interest immediately. It's a sneaky trick.

Best of the rest

There are many cards offering nine-month deals on purchases, such as the Play.com and Amazon cards (both MBNA, so you won't get these cards if you already have an MBNA card), and the Saga card, the Halifax card and the Bank of Scotland card.

Finally, when using your cards for purchases, be wary of using them for balance transfers or anything else as well. The small print when doing so is usually sneaky and expensive.

Get help from lovemoney.com

If you could use some guidance on borrowing more cheaply, we can help.

First, adopt this goal: Pay off credit card debts

Next, watch this video: Soapbox - Keep it simple

And finally, why not have a wander over to Q&A and ask other lovemoney.com members for hints and tips about what worked best for them?

Save yourself massive interest payments by getting a 0% card from lovemoney.com

More: The top new all-round credit card | Reduce the cost of balance-transfer cards