Find the best credit card deals with the Moneywise round-up of the market.

Spending on credit doesn't sound like the best advice - but providing you are sensible and know exactly how much money you are borrowing - and how much it will cost to pay it back - it can be a good way of spreading the cost of big purchases.

Credit card companies continue to offer 0% deals on balance transfers and new purchases. The reason they can afford to do this is they know that many people who sign up simply won't be able to make the repayments without the interest-free period.

Make sure you're not one of those people - if you get a card that offers 0% for 12 months, divide the balance by 12 and set up a standing order to make sure you pay it off back in time.

If you have a card charging you interest then try to pay off the balance in full and on time each month - you'll be amazed at how quickly your debt can grow if you don't.

Earn money as you shop with cashback cards

If you are savvy with your credit card and always manage to pay off your balance in full each month, using a cashback credit card will reward you for spending.

Egg recently changed the face of the cashback credit card market with the launch of a packaged deal. The new Egg Money World MasterCard costs £1 a month (£12 a year) but in return customers receive 1% cashback on all purchases made at MasterCard outlets, up to £200 a year.

This means people only need to spend £100 a month on their card in order to recoup their monthly fee, as long as they pay off the balance in full every month and avoid interest charges of 17.8% APR (typical).

The Egg MasterCard also comes with a balance transfer rate of just 8.9% for life, and there is no fee to transfer balances from other cards. In comparison, the top balance transfer credit cards offer 0% for up to 16 months (subject to a fee of between 2% and 3%) and then revert to around 16% APR.

Another great cashback card is the American Express’ Platinum credit card. With a typical APR of 19.9%, this card provides 5% cashback for the first three months (up to £100), and up to 1,25% cashback thereafter.

* 0.5% cashback on spend up to £3,500 per year
* 1% cashback on spend between £3,501 and £7,500
* 1.25% cashback on spend over £7,501 

However, the drawback is that not all merchants accept American Express.

Best 0% balance transfer deals

Before you start looking for a 0% balance transfer deal, a word of caution; the credit crunch means 0% balance transfer deals are harder to come by, with most credit card companies only accepting people with good credit histories.

There are also a few important factors to bear in mind:

Before you apply, it is worthwhile checking your credit record and making sure all the information companies see about you is correct and up-to-date.

Whatever you do, don’t keep applying for credit cards if you are turned down by one provider; multiple applications for credit within a short space of time could have a negative impact on your credit record and might be held against you in the future.  Read more about checking your credit record

Be aware that most balance transfer cards require to to pay a fee, which is normally around the 3% mark. However, some providers have a minimum amount.

Not all 0% balance transfer credit cards are interest-free for purchases as well so if you do intend to use your plastic for further shopping, then make sure you opt for a card that offers 0% on balance transfers and purchases. However, in most cases you shouldn't use a credit card to pay off balances and make new purchases.

This is because of negative payment hierarchy, a oThis means your payments will be used to pay off the balances attracting the lowest interest rate first. Therefore, if your 0% purchase deal has expired but you still aren’t attracting any interest on your balance transfer, then your payments will be used to pay off the transferred balance rather than new spending.

The crux of this, is that you will end up paying more in interest as your purchase debt (possibly attracting interest of around 18% APR) will not reduce until the balance transfer is paid off.

Virgin Money’s MasterCard

Virgin Money’s MasterCard offers 0% interest on balance transfers for the first 16 months from the date of issue (as long as these are made within the first 60 days) - after this time, you'll pay 18.6% AER on outstanding balance transfer amounts.

Although there is no annual fee, a balance transfer fee of 2.98% (of at least £3) applies.

The card also offers 0% on all new purchases for the first three months from the date of issue. After this time, you will get 50 days to pay off your balance before an of APR 16.6% applies.

Virgin applies negative payment hierarchy. This means that once the 0% period of purchases has expired, your payments will be used to pay off the balances transfer debt first.

This card also offers interest-free money transfers for 16 months, but this jumps to 20.6% APR after this time. 

Santander

The Santander Credit Card offers 0% balance transfers for 15 months, plus a 3% fee (of at least £5). After this time, expect to pay interest of 15.9% on any outstanding balance transfers. 

You'll also recieve 0% interest on purchases for the first three months, but remember that negative payment hierarchy applies so it's best not to use this card for balance transfers and spending.

After the introductory period, interest reverts to 15.9% - although you will receive 56 days to pay off your balance before this is charged on purcahses.

Egg Card Visa

Egg Visa offers 0% on balance transfers until 1 March 2011 (plus a 3% fee) from the date of transfer, after which time the APR reverts to 16.9%. Purchases are interest-free until 1 March 2010.

This card offers discounts with selected retailers, has no annual fee and gives you money of Egg insurance products. One the 0% period has expired on purchases, you have 45 days' interest-free. 

Negative payment hierarchy is used to clear your balance.

Other great 0% balance transfer cards

* Halifax Plus MasterCard offers 0% on balance transfers for 13 months (3% fee), and 0% on purchases for three months. The typical APR is 16.9% but you'll have 59 days' interest free to pay off your balance before interest is charged.

* Nationwide Classic Visa card offers 0% on balance transfers for 13 months (3% fee of at least £5) and 0% on new purchases for three months. The typical APR is 16.9% but you'll have 56 days to pay off your balance before interest is charged.

Best 0% purchases

Although many 0% balance transfer deals also offer 0% periods for new purchases, they aren't specifically designed with people who intend to keep spending in mind. So, if you do want a card that allows you to spend without racking up interest then a 0% purchase card might be better.

So, what’s out there at the moment?

The Tesco Clubcard Credit Card offers 0% interest for 12 months on all purchases, plus 0% of balance transfers for six months (plus a 2% fee). After the introductory periods, you face paying interest of up to 19.9% on purchases and up to 21.8% on balance transfers.

You do get 51 days to pay off purchase balances before interest is charged. Negative payment hierarchy applies.

As well as the generous 0% period for purchases, if you are a Tesco customer this card has other benefits as you'll earn additional points on your Clubcard - one for every £4 you spend. 

Elsewhere, Marks & Spencer Money MasterCard offers 0% for 10 months, after which point you'll be charged a typical APR of 15.9%. Balance transfers are also 0% (subject to a 2.9% fee of at least £5) for six months.

If you make payments within 55 days then you will avoid interest after the introductory purchase period has ended. You'll also earn points for money you spend in the store.

Avoid negative payment hierarchy

If you want a card that won't use your payments to pay off the cheapest balance first (known as negative payment hierachy) then consider Nationwide's Gold credit card.

This card offers 0% on balance transfer for 13 months (subject to a 3% fee of at least £5) and 0% on purchases for three months. The typical APR is then 16.9%.

Once your interest-free period on purchases has ended, Nationwide will use your payments to pay off the debt being charged at the highest interest rate, before that charged at a lower interest rate. So, payments are first allocated to any cash advances (27.9% interest), then purchases (16.9%) and balance transfers (16.9%). Then payments are used to clear any 0% balances.

After the promotional period for purchases ends, you'll have 56 days' interest-free to clear your balance before interest kicks in.

Standard rate credit cards

If you just want a credit card that doesn’t require you to keep chasing introductory offers, then opt for a standard rate credit card.

Barclaycard Simplicity Visa has an APR of 7.8% for purchases and balance transfers, or 15.8% for cash withdrawals plus a 2.5% fee. You’ll get 56 days' interest-free on purchases if you pay the balance off in full and on time each month.

Best to use abroad

Most credit card providers generally charge between 2.75% and 3% on foreign transactions, and £5 for cash withdrawals.

Post Office

The Post Office's card has a typical APR of 16.9%, and offers 0% on balances transfers for the first year (2.98% fee applies) and 0% on purchases first three months. Balance transfers made in the second and third year are also interest-free for five months.

There are no charges for using your card overseas.

Santander Zero (previously called Abbey Zero)

Santander's Zero credit card not only offers 0% periods on balance transfers (12 months) and new purchases (three months), but it also waives fees on cash advances and foreign transactions outside of Europe.

Once the 0% periods end you'll face an APR of 18.9% variable with 56 days' interest-free for new purchases.

Reward cards

Barclaycard’s Goldfish credit card has a typical APR of 9.9% on purchases and balance transfers. It also offers 56 days' interest free. However, for the first three monthsafter opening an account you won't be charged any interest on purchases.

You earn one point for every £1 you spend on this card, with an unlimited number of points available, which can be redeemed in over 25 high street stores.

Plus, when you spend £100 a month or more during the first three months after taking out this card, Barclaycard will reward you with 5,250 extra points - worth £30 in vouchers. If you are transferring a balance of more than £1,000, you will also be given an extra 100 points.

Shops where you can redeem points include Boots, HMW, Marks & Spencer, John Lewis, Waterstone’s, Pizza Express and Odeon Cinemas.

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