Be Smart With Your Credit Card

By Jane Mack | 26 April 2004

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In spite of the fact that we're all supposed to be up to our necks in debt at the moment, a new survey predicts that our credit card spending is set to increase over the coming months.

According to credit card provider, Morgan Stanley, our spending is set to increase by 10% from £730 in the first quarter of 2005 to £803 over the next three months. About a third of it will go on holidays with the rest going on everyday household goods.

The survey reveals that Britons are increasingly using their credit cards to pay for day-to-day expenditure and they now rival debit cards for making everyday purchases such as groceries, petrol and bills.

For spenders who always clear their credit cards in full, cards offering cash back are usually the best type of card to use, the best of which is, er, Morgan Stanley who are paying 2% on money spent between now and August. You can check out the rest of the best cash back credit cards here.

For the rest who need time to pay off their credit cards, the best option is to go for those offering 0% introductory deals on new purchases (as opposed to balance transfers) and, not surprisingly, Morgan Stanley is offering just that with another of its credit cards at the moment. Nationwide and Egg are also among those offering similar deals and all these cards, plus others, are available in our credit card centre at the moment. Other deals worth investigating include Sainsbury's Bank, which is offering an interest-free deal on new purchases for 12 months.

Note that while it's usually preferable to save up for things like holidays and larger household purchases (much better than carrying debts even if they are free), it's worth using your credit card to make the purchase if you're spending more than £100 because of the extra protection it provides.

If you pay by credit card, section 75 of the 1974 Consumer Credit Act allows you to claim your money back from the card company if the seller fails to honour the contract, the item is faulty, the seller wrongly describes it or if the supplier goes out of business with your money before the item or service is delivered.

Find out more in our Credit Card Centre.