The whirlwind shopping event, known as Black Friday, has now become a firm fixture in the UK retail calendar. Last year’s event was the biggest shopping day of the year, Nationwide informs us. So as this year’s Black Friday looms, it’s high time you think about how you’re going to pay for those cut-price goodies. Credit cards could potentially be your shopping ally on the day, helping to spread the cost, while also offering added protection and benefits. The Times published a handy guide.
The Origins and Growths of Black Friday
Originally an American concept, Black Friday arrives right after Thanksgiving, an American holiday celebrated at the end of November. Retailers across the US mark this day with sales and discounts, generating a buying frenzy on a scale of epic proportions. UK retailers caught the trend and now brands like Argos and Currys are fully aboard the Black Friday bandwagon.
Why Credit Cards Make Sense This Black Friday
Christmas follows only a month after Black Friday and shelling out for your festive shopping in the same month could hit your finance hard. Using a credit card carefully can help spread this punch, especially if you’re planning a big purchase. The cost can be divided into manageable repayments, taking the sting out of your purchase expenditure.
However, keep in mind, unchecked usage can lead to debt piling up and damaging your credit score. Beware of interest on credit card balances which can nullify any perks. Unless you have a special purchase card that’s interest-free for a certain period, always repay the balance each month.
One neat trick is to put the equivalent value of a purchase into a top easy-access saving account and earn interest, thereby making money using your credit card. Then repay the card from this savings account. But remember, this only works if you’re not paying interest on the card.
Consumer Protection Under the Credit Card Scheme
Using credit cards for buying items bring another advantage via Section 75 of the Consumer Credit Act. If the retailer sells damaged goods, fails to deliver, or calls in the administrators before your goods are delivered, your credit card company could refund the price you’ve paid. Even international purchases are protected, making Black Friday overseas a tantalising possibility.
There are, however, stipulations to avail this protection – your purchase must cost at least £100 but not more than £30,000. If your credit card provider rejects your claim, you can escalate it to the Financial Ombudsman Service.
The Top 0% Credit Cards You Should Consider
If you’re after a card that offers an interest-free period on purchases, the NatWest card offers 23 months at 0%. However, note that this is only available to existing NatWest customers.
HSBC’s credit card is another top contender, offering a 20-month interest-free period for purchases. But this offer is exclusively for new HSBC credit customers.
M&S Bank’s Shopping Plus card offers an 18-month interest-free period. Plus, you’d earn reward points for every pound you spend, which can be redeemed in store.
Reward Yourself With These Top-Rate Reward Cards
Planning on making modest purchases this Black Friday? A rewards credit card could offer even more bang for your buck. Such cards can give you cashback when you spend – amplifying your Black Friday savings.
The American Express (Amex) cards are serious contenders here, offering good cashback deals and introductory offers. Amex’s Platinum Rewards Gold card, for example, provides rewards such as vouchers, air miles or Nectar points for significant expenditure. But remember, the interest that you could be charged may outweigh your rewards if you can’t clear the debt each month.
You should also be mindful that not all outlets accept Amex because of their expensive merchant fees. However, fintech service Curve allows you to link all your credit and debit cards to a single card, and use it anywhere, even at outlets where Amex isn’t accepted.
Alternatives to Credit Cards
While credit cards are an option for your Black Friday shopping, they aren’t the only way to finance your spending. For example, Chase bank offers a 1% cashback current account which could be an appealing option.
Another option could be an arranged overdraft for companies who offer a 0% interest period. This is an attractive option if you’re looking to withdraw cash on Black Friday, since many credit cards charge fees for ATM withdrawals.
Buy Now Pay Later (BNPL) schemes are an alternative way to make your Black Friday purchases. This allows you to spread the cost of your purchases over time, often with no interest or fees. However, ensure you keep up with your repayments or you could face a high interest charge. Also, BNPL firms are not regulated by the Financial Conduct Authority, but they may still perform hard credit checks on your application.
In conclusion, while credit cards can be an excellent way to make the most of Black Friday, they must be used wisely to avoid debt or damaging your credit score. If used appropriately, not only can they help spread the costs of your purchases, but they can also offer added protection and benefits. For those not keen on credit cards, alternative options like cashback accounts or BNPL schemes can also work. Choose wisely, and happy shopping!