Take full advantage of one cashback credit card right now and you could pocket a tidy sum.
Used properly, cashback credit cards are a great way of earning some extra money from your everyday spending.%VIRTUAL-SkimlinksPromo%
You simply spend on your card, pay off your balance in full each month and pocket a nice bit of cash from your credit card company.
What the card offers
Unlike many of its competitors, the Platinum Cashback Everyday card is free to use. In the first three months you have the card, you can earn 5% on up to £2,000-worth of spending. So if you have a big purchase coming up that you've been saving for, spending on the card could earn you up to £100.
After that three-month period, you'll earn up to 1.25% cashback, depending on how much you spend. If you spend up to £3,500, you'll earn 0.5% back, spend between £3,500 and £7,500 and receive 1%, and spend over £7,501 and you'll earn 1.25%.
Earn another £50 in July
This month, American Express has relaunched its Shop Small scheme, which offers a chance to earn up to an additional £50 in cashback when you spend at small businesses – ranging from shops to garages to takeaways to pubs – around the UK.
All you need to do is register your American Express at amex.co.uk/shopsmall and see which businesses in your area are participating.
Each time you spend a minimum of £10 on a registered Amex card at one of the businesses, you'll earn £5 cashback, up to a maximum of £50. So you can save money at up to ten businesses and support the local economy.
What to watch out for
If you want to apply for the Platinum Cashback Everyday card, you'll need a household income of at least £20,000 a year and a good credit rating.
Also be aware that American Express isn't accepted everywhere, so make sure you check if you're planning to use the card to pay for a big purchase or two.
You need to pay off your balance off in full each month or you'll be charged interest, which will quickly wipe out any cashback. The representative APR (the annual calculation of interest and charges) on this card is 19.9%.
You should also be aware that you need to spend a minimum of £3,000 over a year to qualify for the up to 1.25% cashback offer.
And, needless to say (but I'll say it anyway) there's no point spending unnecessary money or money you can't repay in the pursuit of cashback.
It is reasonable to assume that if you take out a mobile phone contract at £30 a month for 24 months that's exactly what you'll pay unless you exceed the tariff. Yet mobile phone providers have come under fire for a snag buried in the small print – a clause to allow mid-contract price rises.
Prices are rising by a median of 81p a month and 70% of consumers are completely unaware off this sneaky move, according to Tesco Mobile, so be sure to check any new contracts before you sign the dotted line.
Financial service providers always refer to 'typical APR' in advertising to attract customers with favourable rates of interest.
Yet the typical APR on loans and credit cards is only available for those applicants who have a squeaky clean credit record, everyone else could end up with a much higher rate. For example, under EU rules, credit card providers only have to provide the typical APR advertised to 51% of applicants.
So always consider this when applying for accounts and products, and if approved – look out the actual APR that you will be charged.
The highest paying savings accounts on the market tend to come with a string of strict terms, which if you fall foul of, result in a drop in interest. Common requirements include paying in a set sum each month and not making withdrawals during a set period.
Make sure to fully understand these terms before opening a savings account and if you choose an account with a six or 12 month bonus, remember that this will plummet when the bonus period ends.
Cashback credit cards that pay you a small percentage each time you spend on the card are full of loopholes in the small print. All have a maximum spend, but many have a minimum spend too.
For example, the Sainsbury's Cashback Low Rate card advertises that it offers users 5% cashback for the first three months. However the 5% cashback is capped at £50 a month. A further 5% cashback is subject to you spending £500 a month on the card (£250 of that at Sainsbury's).
Attempt to repay your mortgage early and you may be greeted with a hefty fee in the form of an early repayment charge. These penalties vary from lender to lender and even deal to deal, but are typically be around 10% of the outstanding balance.
Details of any early repayment charges should be clearly outlined in your mortgage contract but it is worth double-checking with your lender before you try to make a payment.
Insurance is an incredibly complex area of personal finance and different forms of cover are riddled with different hitches that make it crucial to read the small print. Failure to do so could lead you to pay for a product you would be never be able to claim upon, or unknowingly do something that invalidates your claim.
Always buy the right level of cover for your needs and pay close attention to any exclusions in the policy wording. For example, many travel insurance policies for winter sports won't pay out for treatment of injuries incurred while under the influence of alcohol.
Think a credit card can't do any damage at home in your drawer? Think again. Some credit and store cards charge a dormancy fee if you don't use them regularly.
For example, all Santander-issued store cards, including Topshop and Laura Ashley cards among others, charge a fee of £10 if you remain in debit for three consecutive months.
Exceed the monthly usage allowance in your broadband deal and you could be hit with a huge fee. Common with the cheapest broadband deals on the market, penalty charges for going over your contracted limit can push your bills up even higher than if you paid for a deal with unlimited usage.
According to Talk Talk, some households are being forced to pay an additional £40 per month for exceeding their usage allowance. BT for example, charges £5 per every 5GB extra used.
Familiarise yourself with the download limit in your package and the penalties for exceeding it, decide whether you are better off with an unlimited deal.