Families can save up to £400 on spending at Christmas and over the January sales with the market-leading cashback credit card — if you apply now.

American Express is offering 5% cashback on spending up to £4,000 in the first three months — or £200 per person. You can also apply for a second card for your spouse, so families can receive up to £400 if both parents take out the card.

The cash is credited to your account on the first anniversary of opening it, and every year thereafter.

However, those who envisage spending more on “essentials” such as groceries and petrol — or who are unlikely to spend more than £1,800 in the next three months on their credit card — could be better off with the 3% cashback deal from Abbey.

Abbey gives a maximum of £75 cashback — capped at £12.50 a month — over six months. It only rewards spending on groceries and petrol bought at big supermarkets and petrol stations. Barclaycard’s new Onepulse offers only 0.5% cashback — but gives 5% cashback on London transport expenses.

Andrew Hagger of Moneynet, the comparison site, said: “If you apply for one of these cards online, you should receive it within 10 days, leaving plenty of time for Christmas.”

However, cashback cards only benefit those who pay off a balance in full each month. Those making partial monthly repayments will find the interest charged will more than wipe out any cashback benefit.

If you only paid 10% of the balance each month the interest charges would reach £237 in just five months, assuming you pay the card’s typical 18.9% standard rate, Hagger said.

If there is a risk that you won’t pay off the balance each month, you could opt for the Egg Money card, which offers 1% cashback and has the lowest standard rate among the top cashback cards at 12.9%. Unlike the Amex card, which requires applicants to have an income of at least £20,000 to apply and is not accepted everywhere, the Egg Money card has no stated minimum income requirement.

The best purchase cards, according to Hagger, are Halifax All in One Mastercard and Marks & Spencer Money Mastercard, which charge no interest for 10 months on purchases.

“Don’t spend what you can’t afford to repay when the interest-free period ends, and don’t miss a repayment — otherwise you will lose your interest-free deal,” he said.

The M&S card also offers one point for every £1 spent at M&S and one point for every £2 spent elsewhere. You then receive a £1 reward voucher to spend in-store for every 100 points.

Lloyds TSB Advance Mastercard, PayPal Mastercard and Barclaycard Onepulse offer six months’ interest-free on purchases, while Nationwide offers three months.

Now more than ever, experts are warning against accumulating large balances on credit cards because 0% balance-transfer deals are steadily disappearing from the market.

Peter Harrison of comparison site Moneysupermarket said: “Borrowers with large balances may have been relying on being able to switch to 0% deals, but these are being pulled.”

The best 0% card — from Capital One, which offered 15 months interest free — disappeared this month, as did Royal Bank of Scotland’s. RBS replaced its 13-month deal, and those under the NatWest brand, with a 4.9% rate on purchases. Any balances transferred accumulate interest at the hefty rate of 16.9%.

However, Harrison added: “There are still good deals around. Virgin Money offers 16 months and Halifax still has a deal at 15 months.”

Only those with spotless credit ratings are likely to be accepted. Moneyexpert, another comparison site, says over 3m applications have been rejected in the past six months.