Best credit card rates
We can't do without them and credit cards are seen as an essential item today. But with such a bewildering range of plastic on the market, choosing the right product for you can be a difficult task.
Our regular credit card round-up will give you all you need to know about the best deals, rates, rewards and balance transfers so you'll know where to get the right card for you.
Best 0% Purchase Offers
Whenever you make an expensive purchase, whether it be a long-awaited holiday, a shiny new car or new furniture for your home, you should always use your credit card because under the Consumer Credit Act your money is protected for purchases of anything between £100 and £30,000.
If you are thinking of splashing out, it makes sense to look for credit cards offering 0% on purchases.
The most attractive option for people this month is the Santander Purchase Credit Card, which is offering 0% on purchases for 18 months, with a typical APR of 18.9% after the introductory period has finished.
Next up is the Halifax Purchase Credit Card which will give you 0% on purchases for 17 months and an APR of 16.9%, followed by Nationwide's Select Credit Card which offers 0% for 15 months and an APR of 15.9%.
Best Balance Transfer Cards
Transfer cards are a great way to help make your credit card debt cheaper. But when looking to transfer your existing debt to a new card, always remember to check what fees you have to pay, as well as which ones have the longest 0% period.
Barclaycard's Platinum with Balance Transfer currently offers the longest 0% introductory period, at 31 months with a 2.9% fee and a standard APR of 18.9%.
Halifax's Balance Transfer Card offers 0% period of 30 months with a 3% fee, with an APR of 18.9%. Finally there is the MBNA Platinum Card, which will give you 0% on balance transfers for 29 months, also with an APR of 18.9%.
Low standard rates
If you are carrying a level of debt that you won't be able to clear during your 0% period, then you will need to consider a low-rate card. These can sometimes work out cheaper than paying repeated balance transfer fees as you move your debt around.
Sainsbury's Nectar Low Rate Card offers an APR of 7.8% with no balance transfer charge. It also offers you four nectar points for every £1 spent in Sainbury's and two points for every £1 spent on Sainsbury's fuel.
Tesco Bank's Clubcard Credit Card also has an APR of 7.8% and offers you one Clubcard point for every £4 spent.
Rewards and Cashback
The best reward cards will differ wildly depending on your spending habits, but here are a few attractive offers. The American Express Platinum Cashback Everyday Card offers customers a 5% introductory bonus rate payable in the first three months on the first £2,000 worth of purchases. There is no annual fee with 1% cashback thereafter and a typical APR of 19.9%.
Their Platinum Cashback Credit Card also offers 5% cashback in the first three months and then 1.25% thereafter, as well as a 2.5% bonus if customers spend £10,000 in the first year. The APR is 18.7% but bear in mind there is an annual fee of £25.
The Santander 123 Credit Card offers up to 3% cashback on purchases: 1% at supermarkets, 2% at shops and 3% on train tickets and petrol.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
Moving money from one account to another, whether switching bank accounts or more likely transferring the outstanding balance on your credit card to another card that charges a lower – or 0% – rate of interest. Some card providers may charge a transfer fee that can be a percentage of the balance transferred.
This is used to compare interest rates for borrowing. It is the total (or “gross”) interest you’ll pay over the life of a loan, including charges and fees. For credit cards where interest is charged at more frequent intervals, the APR includes a “compounding” effect (paying interest on interest). So for a credit card charging 2% interest a month (equating to 24% a year), the APR would actually be 26.82%.