A to Z of how to save money this Christmas

Avoid store cards

Store cards can charge extortionate yearly interest rates of as much as 29.9 per cent – almost twice the rate of a standard card. They may offer enticing initial discounts but there is nearly always a cheaper credit option available. Stores like to push their cards even more at Christmas so keep your guard up.

Be paid to shop

Cashback websites such as Quidco.com are a great way to be rewarded while you shop online. For other spending, the new Express Rewards credit card from American Express offers three points for almost every £1 spent at major UK supermarkets, which can then be redeemed on vouchers or gift cards.

Compare prices online

The internet is the best weapon. You can compare retail prices on everything from car insurance to games consoles. Try the new Mozilla Firefox browser plug-in Invsible- Hand.com. This automatically compares prices while you surf, using a discreet drop-down bar within your browser.

Dine out for less

With countless parties on the horizon, you can save a fortune by booking a restaurant through Toptable.co.uk. You earn points every time you book a meal through the website and gain access to exclusive offers. It’s free to join and once you’ve built up enough points you can use them to treat yourself to a free meal.

Eleventh-hour presents

So-called invisible presents make the perfect last-minute Christmas gift. At the iTunes store you can buy loved ones music or films and iTunes immediately sends them an email so they can download their gift. Or why not buy them gift vouchers for spa days or off-road driving on sites such as RedLetterDays.co.uk?

Festive food for less

Save a fortune on the Christmas dinner by comparing prices at all the big supermarkets online at MySupermarket.co.uk. Simply fill your virtual trolley with all the items you need and MySupermarket will show you which supermarket offers the best prices.

Gift recycle

Waste not, want not. Millions of us recycle unwanted (but appreciated) gifts received at Christmas. If you’re worried about giving the same gift back to the original giver, Recycleagift.com offers cash for new and used films, CDs, games and books.

Have a DIY Christmas

Get crafty and save a bundle. Make your own Christmas gifts such as home-made food goodies and hampers. Websites such as BagNBoxMan.co.uk sell packaging items for a more professional finish and old Christmas cards can be reused to make fantastic tree decorations, Advent calendars or simply some festive bookmarks.

Internet shopping safety

Stay safe online by installing the latest anti-virus, anti-spyware and firewall software. Look out for a little padlock on the corner of your web browser while you shop – this indicates that the website is secure and your information is safe.

January sale time

With the 2.5 per cent VAT reduction ending in January 2010, many retailers will kick off their Christmas sales early this year, but there should still be plenty of bargains around in the new year. January is the ideal time to pick up cheap Christmas gifts and decorations for next year.

Know your shopping rights

Shops are legally required to take back faulty or damaged goods. They must also be of satisfactory quality, so if you buy something that doesn’t last as long as you might reasonably expect something to last, take it back to the retailer.

Loyalty can pay

Your Tesco Clubcard points are worth four times more when you use them online, instead of in-store.

So for every £2.50 worth of vouchers you can spend £10 worth of deals tokens on anything from fun days out for the family and airline to restaurant bookings.

Make some cash from your mobile

Make way for your new Christmas gifts by selling your old mobile phone. There are lots of recycling services willing to pay as much as £150 for old mobiles. Compare prices on several sites such as Mopay.co.uk, Envirofone.com and Mazumamobile.com to get the most cash for your particular make and model.

Now plan for next year

Kick off your savings plan by setting up a regular savings account to build up a pot for next year’s festivities. The Barclays Monthly Savings account pays an annual rate of 4.25 per cent, fixed for 12 months. You can save up to £250 per month and, unlike many regular savers, you can miss monthly payments without penalty.

Open an ISA

Make the most of your tax-free allowance by opening an Individual Savings Account (ISA). From April you can invest up to £10,200 each tax year, without paying any income tax on any interest. Of this £5,100 can be put in a cash ISA.

Phone calls for less

A quarter of Britons plan to make calls to friends and family living abroad this Christmas, according to Homephone-choices.co.uk. Override providers such as 18185.co.uk offer much cheaper calls by simply dialling a code before the number you are ringing. Also, consider using VoIP services such as Vonage and Skype to make cheap or free phone calls over the internet.

Quit smoking

Health benefits aside, quitting the fags will save your wallet too. The average price of 20 cigarettes is an eye-watering £5.57; if you smoke a packet a day you could save yourself more than £2,000 a year by quitting. Your health insurance premiums will drop too.

Rent out a room

If you’ve got the space, make the most of the Rent-a-Room scheme by taking in a lodger. You can earn up to £4,250 a year without paying any tax. Contact your insurers before you take the plunge, as it may affect your home policy.

Send e-cards

Save a fortune on postage and send e-cards this year for an eco-friendly, personalised alternative. There are plenty of free e-card websites such as Ecards.co.uk and Virtualgravy.com, but for just £7.25 a year you can send as many animated and musical e-cards from Jacquie-Lawson.com as you like.

Trade old for new

If you’re looking to revamp your wardrobe, set up your own online shop on swapping sites such as FashionSpace.com and Bigwardrobe.com. Then buy, sell and swap your clothes with other members.

Use a credit card for big buys

Remember that if you pay for something on a credit card and it costs between £100 and £30,000, it is covered by Section 75 of the Consumer Credit Act 1974. This means that the credit card issuer is equally liable, so if the retailer goes bust, you can go to the card company to get your money back.

Voucher codes offer extra savings

If you’re shopping online, check to see if there are any discount voucher codes available. MyVoucherCode.co.uk is one of the most popular voucher sites, with nine million unique visitors every month. It offers codes across the retail sector. Simply enter the promotional code at the checkout and the discount is applied.

Winter warmth on a budget

With the cold weather settled in and central heating being turned up, many budgets will be stretched this Christmas. Switching to an online tariff is your best bet. The average annual standard tariff costs £1,232 while the average online tariff costs over £250 less at £960, according to Moneysupermarket.com.

X marks the spot

Always select the Gift Aid option if you’re planning to donate money to charity this Christmas, so that your chosen cause gets an extra 28p for every £1 you give. An estimated £750m of Gift Aid goes unclaimed every year.

Yours for free

Freebie communities such as SnaffleUp.co.uk and Gumtree list a huge range of items that people are willing to give away for free. At this time of year, keep your eye out for people wanting to get rid of their old Christmas trees and decorations. And don’t forget to do your bit and post any of your unwanted items.

Zero per cent purchase cards

These credit cards offer 0 per cent interest on all purchases for a fixed period. Make sure you pay the debt off within the introductory period or you’ll be stung with higher than average interest charges.