UK Credit Card Comparisons - A QUICK GUIDE

With the wealth of information out there about the many different credit cards now available to us, it’s easy to feel confused about how to make the right choice.

0% balance transfers, fee free, cash back, create your own?: the issue can be a minefield unless you know what you are looking for and know how to compare them. Use this quick guide to help get you started.

With the amount of credit cards out there today all desperate to get you to sign on the dotted line, there is a lot of competition. This, in general, is good news for you the consumer as there are now a host of special introductory offers designed to get your custom, so take advantage of them.

Cashback

This offer gives the cardholder rewards in the form of cash or a points scheme. For each time you spend a certain amount of money on the card, you will earn a certain amount of cash or points.

If 0% balance offers are no real benefit to you as you pay off your balance each month and pay little interest, this can be a useful scheme. Beware, however, of very high standard interest rates on some of these cards.

Further information: Cash Back Card Information

Reward Credit Cards

Reward credit cards are identical to cash back credit cards, they just offer reward points which can be redeemed against whichever company the credit card is affiliated with. Popular credit cards of this nature are frequent flyer cards, they are seen by the credit card industry as offering the most value. Examples of popular cards of this type include the Morgan Stanley Buy and Fly or the American Express British Airways card.

Other popular reward credit card examples would include the Virgin credit card or Marks and Spencer credit cards, both are very popular brands with UK consumers.

Further Information: Which Rewards Credit Card is Right For You?

0% Balance Transfers

The ‘buzz words’ of the moment, it seems as though everyone is offering this to lure your custom. An excellent idea if you’re planning on trying to pay off your credit card balance as, of course, you will be paying purely debt with no interest. Periods of interest-free run from anything from 3 to 12 months. Some offer interest free on the balance transferred, some for purchases over a certain period, some both, so seek out the best.

Another consideration is the interest charged after the initial interest-free period. These vary enormously. If you frequently change cards before the end of the period to take advantage of another, this isn’t so important but if you’re not so organised, make sure there is a good low level of interest for purchases and standard rate in the long term.

Further information: A Quick Guide to Balance Transfers

Poor credit history

If you have a poor credit history and fear you will be unable to obtain a credit card or have been refused a card in the past, don’t give up. Many companies specialise in dealing with people with a poor or no credit history. Just because you were refused by one doesn’t necessarily mean you will be refused by all. Credit cards can also be useful tools in rebuilding your credit history. For more on this, see our article; ‘Poor credit history?’

Flexibility

Many cards now offer a ‘create-your own card’ scheme. This means you can choose your facilities and build up a package to suit yourself; cash-back, low purchase rate etc. and many packages are excellent value. Unfortunately these credit card offers seem to be dwindling, with more consumers opting for more 'traditional' offers.