Eastlife Winter 2019

CONSUMER
Martin
on Cash
Lewis
Cash simply isn’t a safe way to spend. It lacks the
protection that you get when paying with plastic
plus pay on your card, and if you know what you’re
doing you can make them pay you to spend on it.
This isn’t a militant call to ditch paper and coins. Cash can be
convenient, help impulse control and budgeting, and needs
supporting to help many older people who won’t or can’t
change. Yet most people should now use plastic for all significant
purchases.
Plus, with cards you can get PAID to spend and make £100s.
Chargeback is the basic protection on most plastic. With credit,
debit and most charge and prepaid cards you get chargeback
protection (full info at mse.me/chargebackprotection), meaning
if you don’t get what you paid for, you can complain within
120 days and ask the card provider to give your money back.
This isn’t a legal protection but it is part of the Visa, Mastercard
and Amex rules. It generally applies to payments of any value –
though there’s a £10 minimum with Mastercard.
I prefer credit cards though
I do all my spending on them as done right, i.e. repaid in full each
month so there’s no interest, credit cards rule as:
• They’ve stronger protection. As well as chargeback protection,
all UK credit cards are also protected by Section 75 of the
Consumer Credit Act 1974 for items costing £100-£30,000
(full info mse.me/section75).
• Section 75 protects the WHOLE transaction, e.g., pay 1p for
a £10,000 car and it’s ALL protected. Pay even a penny on a
credit card, and the card firm’s liable for the entire amount - yet
with a debit card, you’d only get back the amount paid on the
card. One woman contacted me to thank me as she’d read
my info and put a £200 deposit for a £23,000 kitchen on her
credit card – the kitchen firm went bust before delivery and
she got the whole amount back.
• Crucially, credit cards PAY YOU to spend on them. Many offer
rewards each time you spend on them, and it can be
worthwhile.
The top credit cards for rewards.
The key to using a credit card is to neuter its debt ability and turn
it into a pure transaction card by paying it off in full every month,
preferably by direct debit, and never using it to withdraw cash.
Then do all your monthly spending on the card rather than cash
or debit cards – though do stick within the credit limit and don’t
see it as an excuse for additional spending.
There are a lot to choose from, and which is right for you is a
personal choice. There’s a full list at mse.me/cashbackcard,
but here’s a few of the top ones
• Earn 5% cashback on spending. The www.americanex
press.com/uk Platinum Everyday card gives 5% cashback
on all spending in the first 3 months (max £100), then up to
1% after (22.9% rep APR if you don’t fully repay). You’ll need
to spend £3,000+/yr on it to get any cashback. Though
remember Amex isn’t accepted in quite as many places as
Visa and Mastercard.
• Free £25 at M&S for buying a banana. New bank.marksand
spencer.com cardholders get 2,000 bonus M&S points worth
£20 if you spend anything on the card in the first 90 days –
plus there’s a 500 bonus point voucher for M&S spending, so
buy a banana in M&S and you’ve made £25 (19.9% rep APR if
you don’t fully repay).
• Earn 0.5% cashback with overseas spending. As well as
paying cashback on all spending, the www.tandem.co.uk
credit card is a specialist cheap overseas card – so it doesn’t
add the usual 3%-ish exchange rate fee and you’ll get the
same near-perfect exchange rate the banks do when you
spend on it overseas (18.9% rep APR if you don’t fully repay).
It’s beatable for cashback and spending abroad individually,
but it wins as a one-card spending solution. The Aqua Reward
card (www.aquacard.co.uk) is similar but has a higher APR.
Martin Lewis is the
Founder and Chair of
MoneySavingExpert.com.
To join the 13 million people
who get his free Money Tips
weekly email, go to
www.moneysavingexpert.
com/latesttip
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