Best credit card rates
There is a huge range of credit cards on the market and it can be confusing to know which one to choose. With card fees, introductory offers, rewards and typical APR all to sift through how do you know which card would best suit your needs?
Moneywise's regular credit card roundup cuts through the small print to bring you the best credit cards in each category.
Best 0% purchase offers
The advantage of using credit cards to pay for expensive purchases, like holidays or furniture is that under the consumer credit act your money is protected in the event of a complaint or problem with the purchase.
Anything bought on your credit card over the value of £100 and up to £30,000 is safeguarded but if you are going to spend large amounts on your plastic look for a credit card offering 0% on purchases.
Best 0% on balance transfer offers
When looking for a balance transfer card, as well as comparing which cards have the longest 0% periods don't forget to look out for the fees too.
These are around the 3% mark but some cards will also charge a minimum cash spend of £3–5 per transfer, if this is greater than the percentage fee. Depending on the size of your balance transfers, this minimum cash amount could take off some of the sheen of the 0% period.
Low standard rates
If your debt is so large you won't be able to clear it during the 0% periods on offer then consider going for a low-rate card. These can sometimes work out cheaper than paying repeated balance transfer fees as you shuffle your debt around.
Rewards and cashback
The best rewards card will differ widely depending on spending habits and personal taste but here are a few enticing offers.
If you go away a lot then look for a credit card that doesn't charge for overseas use. Halifax Clarity Credit Card, Halifax Rewards Clarity Credit Card, Metro Bank Personal Credit Card and Saga Platinum Card don't charge any foreign purchase fees worldwide.
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%.