Take a slice out of your spending

YOU can have your cake and eat it. Act NOW and you can get FIVE per cent off all your Christmas and January sales shopping.

It's the PERFECT time to grab a "cashback" credit card which as it pays you to spend can easily earn you £100s a YEAR. Why right now? It's simple-the top card by a mile, the Amex Platinum, pays a BARNSTORMING 5 per cent cashback for three months on all spending up to £4,000.

Grab it now and by the time you get it, the SUPER-BOOSTED rate perfectly fits the seasonal splurge AND January sales time, our biggest spend of the year.

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CASHBACK cards can make you serious money, but right up front, you need to know one big GOLDEN rule.

Always set up a direct debit to pay the card off in full each month, so you'll never pay interest, otherwise that more than wipes out any gain.

Credit card companies offer cashback to seduce you to spend, as the interest charged dwarfs the cashback paid. Yet repaying in full means you pay no interest at all.

So if you need a card for borrowing on, not just spending, this ISN'T for you. Instead focus on getting the lowest interest rate possible-all best buys are at www.moneysavingexpert.com/spendingcards.

Sneaky

Yet some sneaky card providers DON'T even have a "pay off in full" box on their direct debit forms. To stymie this tactic, simply write "Pay off in full" by the boxes and pop it back in the post. They ought to honour this but, to be sure, call 'em up and check.

As there's no interest, you've effectively turned a credit card into a debit card. While this isn't an excuse to spend more, it does mean from now on that you can safely use the cashback card for ALL normal spending, replacing cash, cheques, and other debit and credit cards.

After all, it pays you to spend on it-the others don't.

The added bonus is pay for something costing more than £100 on any credit card and you get Section 75 consumer protection. This means if your goods arrive damaged, or disappear if the company goes bust before they're delivered, you'll be able to claim money back from your card company.

THE TOP CASHBACK CARDS: The benchmark level for cashback is one per cent, so any card paying more than that is a biggie.

American Express Platinum Moneyback credit card pays five per cent for three months on purchases up to £4,000, after which rates are tiered up to 1.5 per cent depending on how much you spend.

Yet you need to earn £20,000 to get it and have a reasonable credit score.

Earn

Spend £10,000 on it in the first year, which isn't unreasonable if you use it for all spending, and that's £195 earned.

To find out exactly how much you'll earn for any particular amount spent over a year, use my special calculator at www.moneysavingexpert.com/cashbackcards .

BEST OF THE REST: If you don't fit Amex's criteria, the next top picks are the Halifax Cashback Credit Card and Egg Money (not to be confused with the non-cashback paying standard Egg card) which both pay around one per cent cashback.

Egg CAPS the cashback at £200 a year, but you would have to spend £20,000 to get that back so it shouldn't put you off.

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WHAT a week! With the Bradford & Bingley being nationalised and US politicians rejecting, then accepting, the credit crunch bail-out, these are scary times.

My mailbag's been jammed, so let me answer your three BIGGEST concerns.

Where's my money safe? Today, you're protected up to £35,000 per person per financial institution but this RISES to £50,000 from Tuesday.

If you've more, stay safe by spreading cash around different accounts-or for 100 per cent safety there's government- owned Northern Rock and NS&I, but rates are poor.

Alternatively, the Irish governments promised to protect ALL savings, so some Irish-owned UK banks get this, including Post Office Savings, Bristol & West and Anglo-Irish, which offers a top 6.4 per cent account.

There's a bank-by-bank guide at www.moneysavingexpert.com/safesavings

What if I'm a B&B saver? Giant Spanish banking group Santander, owner of Abbey and Alliance & Leicester, has snapped up B&B's savings business so it's now run by Abbey. But monitor your interest rate at least ONCE a month.

Most savings rates are variable so Abbey could drop them-if you earn below six per cent ditch and switch.

What if I've a B&B mortgage? All B&B mortgages have been nationalised, and this probably ain't good news. With Northern Rock, mortgage rates were deliberately hiked to encourage customers to move their debts elsewhere, effectively paying the government back.

It's no problem in normal mortgage markets, but for those who have over-borrowed, it's INCREDIBLY tough to get a new deal and could leave many with unaffordable mortgages.

Send questions for Martin to NOTW@moneysavingexpert.com.

TV money guru Martin Lewis is the creator of the Consumer Revenge website MoneySavingExpert.com, packed with information on how to get more money in your pocket.

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