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.
The best option is Halifax's All in One card, which has a 15-month 0% purchase period. After that the typical APR is 17.9%.
Next best is the Barclaycard Platinum with Purchase card, which offers 0% on purchases for the first 14 months. After that the typical APR is 18.9%.
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.
The Barclaycard Platinum credit card with Extended Balance Transfer currently offers the longest 0% introductory period at 25 months, with a 2.9% handling fee. Customers must carry out a balance transfer within the first 60 days of account opening. The standard APR is 18.9%. You will need an income of at least £20,000 and to be over 21 to apply.
Halifax has the next best deal with its Balance Transfer credit card. It also offers 0% on balance transfers for 25 months but the transfer fee is 3%. The standard APR is 18.9%.
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.
Sainsbury's Bank Low Rate Credit Card charges 6.9% APR and there is no balance transfer charge. However, unlike other Sainsbury's cards, cardholders cannot earn nectar points with this card.
The next best option is the Barclaycard Platinum Simplicity card, which charges 7.9% APR and has no balance transfer fee. Cardholders can't do balance transfers between other Barclaycards and to be eligible for this card applicants must be over 21 and have at least four years good credit history.
Rewards and cashback
The best rewards card will differ widely depending on spending habits and personal taste but here are a few enticing offers.
Collect one clubcard point for every £4 spent on all purchases with the Tesco Clubcard Credit Card. Because it also doubles as a Tesco Clubcard you can collect your credit card points on top of your usual clubcard points when shopping at Tesco. Typical APR is 16.9%; however, you can get 0% on purchases for 16 months and 0% on balance transfer for nine months with a 2.9% fee.
The British Airways American Express credit card will give you 3,000 Avios points if you spend £500 in first three months. The card also enrols you into the British Airways Executive Club. There is no annual fee and the typical APR is 15.9% (variable). You need an annual household income of at least £30,000 to apply for this card.
If you go away a lot then look for a credit card that doesn't charge for overseas use. The Nationwide Select Card, Saga Platinum, Halifax Online Clarity and Post Office Platinum cards 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%.