Making free cash back on your credit cards - Tip of the Week

This is a tried and tested method of making money back on Credit Cards. Basically getting cash for free from a bit of paperwork.

The basics are this. Apply for a 0% credit card. Choose how to use the card in one of the following:

The 0% on new purchases card.

Make your purchases up to your decided limit on the card. That is, instead of using your transaction account and cash from your pay each month you use the credit card for all your purchases. Don't go buying extras, just your normal living expenses like groceries, petrol etc. The money you haven't spent in your transaction account (because you used the credit card) you put into a high interest savings account.

Avoid paying anything but the minimum amount due on the card. The money you don't spend on repaying the card you invest in a high interest bank account.

Don't forget to pay the minimum amount each month! Otherwise this will backfire. Best idea is to set up a direct debit to pay it.

Before the card is due for payment you repay it with the money you have invested in the high interest savings account. You will find you have made money in interest which is then yours to keep!

Balance Transfer Method

Some cards will let you transfer the balance from another card and give you 0% interest for a set period. Virgin and MBNA are currently in this group. Always read the terms closely to check you are able to withdraw cash into your account. If you are able to withdraw cash from these cards with no interest use this as your spending/cash account. Then bank the money you would normally spend into a high interest account. When the interest free period comes up repay the card from the high interest savings account and the interest you have made is yours!

Don't forget to pay the minimum amount each month! Otherwise this will backfire. Best idea is to set up a direct debit to pay it.

NOTE - These methods are best excercised if you have a good credit rating and are disciplined. If you are not then you risk making poor decisions and slipping into more credit trouble.

High Interest accounts?

I use ING Direct which is brilliant but there are many around. Make sure the high interest account is 'on call' , meaning you can withdraw it at anytime. Or at least make sure if you invest in a fixed term account you don't invest longer than you have to pay back the credit card.

0% cards with cashback or rewards

Amazon

M&S & More

Egg Card

HSBC Credit Card

Basic Maths

Imagine getting a credit card with a