Do you always use cards, or do you prefer cash? Are you likely to use services like Klarna or PayPal? What about gift cards and smartphones?
I’ve taken a look at the pros and cons of the different ways you can pay to help you choose the best option.
Competition
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With lockdown measures forcing non-essential shops to close through England and some other parts of the UK, we’re going to be doing most of our shopping online over the next few weeks – and that means Black Friday and most Christmas shopping.
In this episode I share how you can make sure you get the best price when shopping online.
Competition
To celebrate 200,000 downloads and 150 episodes I’m offering listeners a chance to win a one hour video chat with me. To enter you need to leave a review of the podcast on Apple Podcasts and send me a screengrab. Full details here.
From tax avoidance to surprisingly high prices, it could pay to shop less at Amazon. Plus some alternative online retailers you could use instead.
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Over the last year, I’ve been making a conscious effort to use Amazon less. In all honesty, it’s not been the easiest thing for me to do.
I’m hardwired to hunt down the lowest prices wherever they might be. And often there are some huge discounts and deal stacks at Amazon that make items super cheap.
So I’ve lapsed on a few occasions. Sometimes I’ve forgotten about my boycott and clicked without thinking – a deal for super cheap peanut butter is one I regret! It might have been 50% off the RRP, but in total it was barely a fiver saved.
And there have been a handful of times where the discount was just too tempting – last month I saved £160 on an iPhone 12 Pro (a misprice) and £85 on a Canon lens (a daily deal).
At other times the next day delivery has been a clincher – I realised I needed a case and screen protector for that new phone the day the phone arrived. There was also a gift where it was only in stock on Amazon.
I’m also a Kindle user, meaning any digital e-books I want have to come from Amazon – though I tend to only pick up 99p special offers.
But, despite these purchases, there are dozens and dozens of other items I could have got from Amazon this year where I’ve deliberately chosen to go elsewhere.
I’m willing to spend extra to buy from a different retailer, whether that’s through a higher price or factoring in delivery charges. And in many instances, the difference was minimal or non-existent.
Why am I doing this? There are a few reasons which I’ll outline below. You’ll be familiar with some of them already – but I think a few might surprise you.
Of course, I’m aware you might not care about some of the more ethical points.
You might also not have the luxury of being able to afford to care. Though I can stump up the cash to buy a book at full price, many can’t. So getting the lowest price could be more important to you.
Though personally I’ve been able to get out of the house during the pandemic and visit stores (once they reopened), I know having Amazon Prime was a lifeline for many.
And there will still sometimes be those promotions or discounts that are just so huge it’s hard to say no.
But anything I can do to redistribute the majority of my spending can only be a good thing.
Here are my top reasons to stop or reduce your spending at Amazon.
Amazon isn’t always the cheapest
A big mistake people make with Amazon, especially if they have Prime, is to assume it’s always the cheapest. Though it can offer big savings, it can also be ridiculously expensive.
Sometimes this is just sellers putting higher prices on Amazon than elsewhere, other times it’s something called drop shipping. This is where a seller lists an item for sale at a set price. When you buy it they then order it from another retailer and get it set to you! Either way, you pay more than you need to.
Yes you might have to pay postage at Lakeland, but you only get it free with Amazon if you have Prime. Or you might also be able to just pop into a store and get it for more than half the Amazon price.
Ikea lint rollers
Head to Ikea and a refill pack of four Bastis will set you back £2.25. But over on Amazon you’ll pay £6.99.
If you don’t fancy braving the Ikea maze and decide to pay Ikea’s £4 delivery fee, you’ll pay more via Amazon – even if you have the Prime free delivery.
Stamps
A few years back I found out that some shops can charge what they like for stamps. And one place where you’ll get ripped off for for first and second class postage is Amazon.
A pack of 12 1st class would cost you £9.12 from the Post Office or supermarket. This seller has put them on Amazon for £10.49.
You’d pay £7.80 for 2nd class. But I found them on Amazon for £11.47! That’s more than the already overpriced 1st Class stamps there!
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Listen to Cash Chats, our award-winning podcast, presented by Editor-in-chief Andy Webb and Deputy Editor Amelia Murray.
Amazon Prime is very, very popular. For £79 a year you get free next-day delivery, access to special deals and sales, TV & film streaming and more.
Yes some of these can save you cash, but really the whole point behind Amazon Prime is to get you to make Amazon your number one destination. If you’ve already paid for free shipping, why would you pay again elsewhere?
it’s not just Prime. I mentioned in my introduction that I’ve got a Kindle. If I want to read books on it, I have to buy them from Amazon. Again I’m locked in. I also made the decision early on to go with Echo smart speakers. If I want more of these, or other smart devices, it can often make sense to stick with Amazon.
This essentially reduces your choice and ability to shop around – and therefore get the best price.
Prime makes you more likely to spend money
If you have Prime you’re also more likely to not just shop solely with Amazon, but spend money you hadn’t planned on parting with.
Free and fast shipping is once again the big driver here. It’s so, so easy to buy things this way that it can be addictive. Click. Click. Click.
And those special offers such as Prime Day can encourage you to buy things because of your “exclusive” discounts. If you don’t have Prime, you’re far less likely to spend that cash.
So reduce your time on Amazon and you’ll likely spend a lot less money.
Amazon hurts the high street
Amazon isn’t the only retailer accelerating the decline of the high street, but it is the biggest. During the summer it recorded a sales increase of 37%, thriving during the pandemic while others edge closer to collapse.
Every month more retailers, large and small, announce store closures and profit warnings. They struggle in normal times to compete with the scale and low overheads of Amazon.
If we want our town centres and shopping centres to survive we need to spend more of our money with them – and that probably means at the expense of Amazon.
Amazon is not an ethical company
Finally, the biggest reason to not use Amazon – and the other main motivation behind my reduction in spend.
From the treatment of workers through to tax avoidance, they have a bad rep. A really bad rep. Though others will be doing the same things and some will be worse, I don’t feel we can pretend that Amazon’s abuses of the law and trust justify low prices.
Whether you want to completely cut out Amazon or just reduce how often you use it, I’ve got a few suggestions to help.
Pay for Prime only when you really need it
One way to use Amazon less is to ditch Prime. That way you won’t be tempted to get the value of your membership by using it to shop more and more.
If that’s a step too far, you have options to keep it but pay less. You don’t have to sign up for the full year of Prime. Rather than shell out £79 for 12 months you can pay £7.99 a month.
Obviously that’s more expensive over 12 months, but if you pick and choose particular months – eg ahead of Christmas or around Prime Day – you’ll pay far less.
You can also opt for a £5.99 monthly fee that is just for Prime Video. You can change your subscription in your account.
Support the retailers you love
We’ve seen so many shops disappear over recent years, I’m trying more and more to buy from the ones I’d really miss if they were to do. From small local merchants through to the likes of John Lewis and M&S.
It’s worth seeing if small shops have their own online shop or listing on social media. Or even just call them up. Many are offering click & collect services during restrictions.
For books, one new site worth checking out Bookshop.org which provides a platform for hundreds of independent book shops to earn profit from online sales.
Go to the Amazon sellers direct
You can obviously shop around to find low prices elsewhere, and price comparison sites can help with that. But there’s a trick that could get you the same or similar price to the one you find on Amazon.
When you buy something at Amazon that’s not sold by Amazon, you’ll see the name of another retailer. It’s always worth looking to see if they have their own online or high street shop.
Here’s my monthly update on the changes in UK savings in November 2020 and the accounts with the highest interest right now.
This episode includes analysis of what happens when TSB and NS&I cut their rates in the next few weeks, why the best paying regular savers could be on their way out and news of a new account paying 1.25% from Chip.
You can now swap Nectar points at Sainsbury’s for twice their value to use on specific categories. So you can’t use it on your food shop, but you can use it on things like home, Tu clothing and Taste The Difference wine (which is what I stocked up on last night).
New customers to Virgin Money can switch and get £180 worth of wine, as well as 2% interest and fee-free spending abroad. Here’s more info.
Also, you’ve got until Tuesday to grab £125 for moving your bank to Natwest. The money will be paid by the 12th February 2021. This is open to existing customers who haven’t the free cash in the last three years. You can also take advantage of a monthly reward worth £3 a month after a fee.
A 100 offer to switch to RBS ends the same day, but as you can’t do bother I think the Natwest offer is better.
it’s time to check your MyJohnLewis account to see if you’ve got a money off voucher to spend this week. I had a £5 code with no minimum spend, as did my mum and my dad – but my wife had nothing! Here’s more.
I always try to get this offer around this time of year so I’ve got a very cheap copy of the Christmas double issue. Though I watch a lot less “normal” TV than I used to, there’s still some great stuff on the BBC and C4 so this means I won’t miss out!
Another Space NK deal. This time if you spend £100 you’ll get a £25 voucher to spend before Christmas Eve. Last year the same offer ran and I was able to stack the gift card alongside other discounts.
The deadline to add funds to an Asda Christmas Savings card is Sunday at 5pm. Depending on how much you add, you’ll get a bonus added to the card on Monday worth up to 5.3%.
It’s expected that record numbers of households are currently unable to afford basic essentials like food.
A 61% increase in demand for a food parcel this winter is predicted- and those figures were from before the new lockdowns.
So what can you do? We’re not all Marcus Rashford but we can all do our bit.
In this episode I talk to fellow money bloggers Faith Archer and Nicola Richardson about ways to support your local foodbank, including getting involved in the UK Money Bloggers’ #FoodbankAdvent challenge.
How to boost the money you’ll make from cashback credit cards including American Express.
I love cashback credit cards. They’re one of my favourite ways If you have a cashback credit card these are some basic tips that will increase your earnings.
Rather watch than read (or do both) then check out this video from my YouTube channel
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Get extra cashback or a referral when you apply
Many of the best cashback or reward cards will give you a little extra when you join. It can come as a referral code from a friend, cashback from a cashback site or a gift card from the credit card provider.
American Express
The highest paying ones are when you sucessefully apply for an Amex via Topcashback or Quidco and you can earn some additional cashback, currently up to £30. Rates can change but here are the latest:
Card
Quidco rate
TopCashback rate
American Express Platinum Cashback
£20
£10
American Express Platinum Cashback Everyday
£5
£15
American Express Preferred Rewards Gold
£10
American Express Rewards
£10
£10
American Express Nectar
£30
Updated 22nd March 2021
If you’ve not already signed up to either of these cashback sites then you can get yourself an extra £10 or £17 cashback as a new customer. You probably can’t get this new member bonus cashback by applying for the Amex as there’s a minimum spend – but that’s easily rectified with your next online shop! Check out thelatest new member deals here.
Or you can see if any friends already have the card you’re after and see if they have a referral code where you both get a payment if you successfully open an account. This can sometimes beat the cashback rate so it’s worth checking.
Here are the offers you’ll see on the credit card company websites.
Card
Welcome gift
Amazon Platinum
£20 Amazon gift card
John Lewis Partnership Card
Occasional £20 John Lewis gift card (not at present)
Marks & Spencer Reward Plus
£15 gift voucher
Sainsbury’s Nectar Reward
10,000 Nectar points, worth £50 (spend £400 at Sains, Argos to qualify)
Correct 22nd March 2021
Time your application
All of the American Express cards listed below offer a huge bonus when you join – worth £100 or more. And this is on top of the cashback site / referral code bonus.
But the time to get these welcome bonuses is limited. Most of the time you have three months to get the increased cashback rate from when you open the card.
These spending levels tend to be between £2,000 and £3,000. With the cashback cards, if you spend less you won’t get the full bonus. But it’s worse with the reward cards. If you don’t hit the target you’ll get nothing.
So it’s important that you open the card when you know you can hit those spending thresholds. That could be a big purchase or just an expensive month (eg you’ve just moved house or Christmas). Or you might be able to hit it with your everyday spending.
Card
Bonus deal
Max value
American Express Platinum Cashback
5% back on first £2,500
£125
American Express Platinum Cashback Everyday
5% back on the first £2,000
£100
American Express Preferred Rewards Gold
20,000 Reward points when you spend £3,000 (in addition to 1 per £1 spent)
£186*
American Express Rewards
5,000 Reward points when you spend £2,000 (in addition to 1 per £1 spent)
£56*
American Express Nectar
20,000 Nectar points when you spend £2,000 (in addition to 1 per £1 spent)
Earning cashback on your card is great. But you can earn more if you have a partner. You can get a supplementary card in their name so they can earn cashback too.
Though they’ll have their name on it, it won’t be their card. This means you’ll be liable for all their spending! So make sure you trust them – though you’ll see all their transactions in your account so it’s easy to make sure it’s not being abused.
Supplementary cards are also handy when it comes to joining bonuses – more on these in a bit.
Spend as much as you can on the card
I hardly use my debit card. Every bit of everyday spending I do is on a cashback credit card.
This means I am earning on every pretty much every purchase. There might be a handful where I don’t, those under £1, but I wouldn’t have earned anything on them anyway.
This can take a little more admin to ensure you don’t spend more than you can afford, but apps like Yolt and Money Dashboard allow you to see the balance on your credit cards alongside the ones for your current accounts.
The only times I’ll use my debit card now is if there’s an additional cashback offer on that card linked to a specific retailer (eg this year I’ve had money back from Now TV and Beer52 from Natwest).
Pay the full amount every month
A very basic one, but probably the most essential. If you don’t clear the card and end up paying interest it’ll wipe out any cashback you’ll have earned. Set up a direct debit so this happens automatically – just make sure you have enough in your account when it’s time for that to be paid.
Watch for annual fees
Some cashback credit cards are free in year one, but charge you each subsequent year. With the Amex Gold (£140) and Amex Nectar (£25) cards I’d cancel before you are charged and apply for the free Platinum Cashback Everyday card or the Membership Rewards card.
The Amex Platinum Cashback card might be worth keeping, despite the £25 fee, if you spend enough. Check out my review for more on this.
Boost American Express cashback
The highest paying cashback credit cards, and the ones with the best promotions are from American Express. These tricks are specific helping you make even more money from an Amex credit card.
Use PayPal
Not all retailers take American Express, which is frustrating when you’re trying to earn cashback. But there is one workaround for online purchases, and it’s to use PayPal.
Since you can connect your Amex to PayPal you’re able to still earn money on your purchase.
However, it’s worth noting that using PayPal can affect your consumer rights if something was to go wrong. This is important for anything that costs more than £100.
Check for extra offers
Something I love about American Express are the bonus offers you can activate to your card – especially the annual Shop Small promotion which is worth up to £50 per card.
You’ll need to add the to your card and some of the best ones go fast. So make sure you check on a regular basis to see what deals are on there.
If you have a supplementary card and want to take advantage on there too it will also need to be added by whoever has the card in their app/account.
Have more than one type of Amex
The more cards you have, the more offers you can use. So for something like Shop Small, you could have two Amex cards in your account, plus two supplementary cards, giving you access to the promotion four times, potentially worth £200.
And sometimes the extra offers mentioned above are specific to a type of card. So a free Membership Rewards card might have a deal that’s not on a Platinum card. And the Platinum Cashback Everyday card the other way.
However it’s worth noting that at times offers are user specific so you might not see them in your account no matter how many cards you have.
The multiple welcome bonus trick
You can only get the welcome bonus once – unless you’ve not had a card in your name for two years.
You could cancel the card and wait two years to reapply and get that bonus – but that has downsides. For a start you won’t be earning the cashback at Amex levels during this time. Plus you don’t know if the welcome bonus offers will still be around in two years or if the rules will have changed.
However, if you have a partner there is a work around so you can get a new bonus every two years.
First you open an Amex and keep it for a year. Then at the end of the first year you cancel your card and your partner applies for their own card. You’ll both get the welcome bonus, and remember you can get supplementary cards to you’ll both be earning cashback in this time.
Then once it’s been two years since you’ve had a card, you can open a new account yourself and get a new welcome bonus. Your partner cancels their card, and the two year cycle starts again.
As England goes back into a stricter lockdown for at least a month a raft of emergency financial measures such as furlough and payment holidays have been extended.
Here’s what you need to know about the schemes and who is eligible.
Plus my thoughts about your spending in this period, especially in the run up to Christmas.