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How to find the best credit cards

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By Nevena Mulyachka and Mark Todd            
Nevena Mulyachka is moneyhelpline’s marketing manager, specialising in money products such as insurance, credit cards, loans and savings. Mark Todd is one of the founders of energyhelpline and moneyhelpline. He is regularly on BBC1 and Radio 5 Live commenting on switching and saving.

Last updated 01/12/16

Which card is right for you?
Credit cards are many and varied; there are thousands of deals to compare, covering a great range of different needs and preferences. The good news is that there are lots of great offers to take advantage of as companies try and attract new customers.

Here we talk about the different types of credit cards out there, the type of pitfalls you need to look out for, and ways to make the most of the deal on offer.

A word of caution


Balance Transfers
A balance transfer credit card charges a 0% rate on any debts you shift from another card for up to 41 months and is great if you want what is essentially an interest-free loan to repay your credit card debt.

You’ll often have to pay a fee in order to transfer your debt (normally 2-3%), so factor this in when working out how much you can save.

The golden rules to get the best from these cards are:
1. Don't spend on it.
2. Always pay the monthly minimum or you might lose the 0% deal.
3. Try to clear the debt before the end of the interest-free period and if not, shift it again.

Click here for our full guide to balance transfer cards
Click here to compare balance transfer cards



A 0% purchases credit card charges no interest on spending for a certain period, so is ideal for spending or for when you’re planning to make a big purchase now and want to pay off the cost over a long period interest-free.

Always make sure to pay the monthly minimum and try to clear the debt in the 0% period. If you don’t manage to do this, you could get a balance transfer card to move your debt for another up to 41 months interest-free and avoid paying high interest rates.

Click here to read our guide to 0% purchases credit cards
Click here to compare purchases credit cards



Cashback and Reward Cards
Every time you use a cashback card, you get paid. Similarly, when you use a reward card, you collect points or other rewards such as airmiles or loyalty points.

Both can be an easy way to make hundreds of pounds a year. These cards are great for regular spenders who can pay off their balance in full each month.

Click here to read our guide to cashback and rewards cards
Click here to compare cashback and rewards credit cards



Most debit and credit cards add a commission (2-3%) to the exchange rates banks themselves get.

You can avoid this with a specialist card that doesn’t, saving you money when going abroad. Use for spending overseas and make sure to always repay in full to avoid interest charges.

Click here to read more about cards for using abroad
Click here to compare credit cards for using abroad



Credit Builder
These cards are great for those with poor or no credit rating, which means they’re also good for young people starting out on their first credit cards or for those who’ve previously incurred multiple charges, defaulted on debts or had CCJs.

Avoid borrowing large amounts and strictly repay every month in full so that there’s no interest cost - borrowing new debt will be hideously expensive, as they rarely offer long interest-free period and usually have a much higher than the average interest rate.

If you're looking to build your credit history by using this type of cards, the tip here would be to borrow small amounts each month (e.g. do your supermarket shopping or buy fuel on them) and repay them in full before you are charged interest. This is likely to increase your credit score too.

Click here to read our guide to credit builder cards
Click here to compare credit builder cards



All-rounder card
These are cards that banks offer in order to entice new customers; they’re great if you don’t have an amazing credit score (they give you two uses with just one credit check), or if you dislike trying to keep on top of too many cards.

All-rounder cards offer cheap introductory rates on BOTH balance transfers AND purchases. The intro deals are often not as competitive as their more specialised versions but they’re more than worth taking a look at if you want to move your debts to a cheaper rate and you need a card to spend on.

Beware the trap! Be careful with these cards if the 0% deal for purchases is shorter than that for balance transfers. If you don’t keep track of this, you may end up falling into a trap where you’ll find yourself spending on what has essentially become a balance transfer card.


Guide to Credit Scoring
Credit scoring is used to predict your likely behaviour so that insurance companies and lenders can decide whether or not to take you on. It not only decides what products you might receive, but also how good the ones you get actually are.

This is particularly pertinent to credit cards since the APR rates that they quote you are only ‘representative’, meaning that they only have to give their best quoted rates to the majority of their applicants and can choose to accept you at a less favourable rate based on your credit score.

You should check your credit files regularly (e.g. once a year), and always before making a big application (e.g. a mortgage). When you do so, make sure to be vigilant and check every detail.

Also, keep an eye out for identity fraud by watching for products that aren’t yours. If you do have errors on your file, make sure to get them corrected, and in case of difficulty, contact the free Financial Ombudsman, which can order lenders to correct errors.

Click here to find out more
Click here to compare credit report agencies with free trials

Credit Card Jargon Buster
Click here for a simple explanation of credit card terms


Credit Cards

 These guides are for informational purposes only and do not constitute advice. For best personal advice contact a financial adviser.

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