Your complete guide to the best credit cards
Before you apply for your next credit card, think carefully about not just the provider but what you’ll be using the card for.
Some cards are good for one or two services but hopeless for others, so it pays to shop around to get the right option for you.
In this detailed guide, we’ll examine the most common reasons to own a credit card and reveal the best choices in each.
Best everyday credit cards
Everyday credit cards do exactly what they say on the tin – offer you the most flexibility for everyday use while having a reasonable interest rate, a balance transfer option and an initial interest-free period on purchases.
- Virgin Money 26 Month All Round Credit Card is the most popular with customers at uSwitch, with 18.9% APR and 0% interest on balance transfers and purchases for 26 months. However, applicants must have a good credit history, and there is a 2.9% balance transfer fee.
- M & S Shopping Plus Credit Card gets top marks from The Motley Fool, offering 0% interest for 20 months for balance transfers and purchases. You’ll also earn M & S points as you shop. The reward version of the card offers extra M & S points.
- Santander Everyday Credit Card offers an enticing 27 months of 0% interest on balance transfers and without a fee. This card sits in third only because the 0% interest on purchases is for three months only. There are cashback rewards at outlets including Costa Coffee, Subway and Morrisons.
Best balance transfer credit cards
Astute credit card holders know they can shop around for a new card and transfer the balance from their old one, benefiting from a lower interest rate or even an interest-free period. Balance transfers are also a great way to consolidate debt from several cards to one.
- Barclaycard Platinum with Balance Transfer offers 0% interest on your transferred balance for 20 months while offering a respectable 19.9% APR on everything else.
- Halifax Balance Transfer Credit Card offers the same terms as Barclaycard but gives you 90 days to transfer a balance compared to the former’s 60 days.
- Sainsbury’s Bank No Balance Transfer Fee Credit Card gives you 0% interest on transfers for 22 months, according to comparison site money.co.uk – but the flip side is APR is slightly higher at 20.9%.
Best credit cards for purchases
If you use your credit card simply for purchases and are not concerned about balance transfers and other perks, you need to look at any interest-free purchase promotional period, followed by an ongoing generous low APR. Filtering results on money.co.uk for longest purchases shows:
- Sainsbury’s Bank Dual Offer Credit Card, which boasts 0% interest on all purchases for a hefty 28 months, followed by a representative APR of 20.9%. Use the card in Sainsbury’s, and you’ll also earn additional Nectar points.
- Barclaycard Platinum with Balance Transfers but you can ignore the balance transfer if you wish and simply enjoy the 27 months of 0% on all purchases, followed by an APR of 19.9%.
- Virgin Money All Round Credit Card offers one month less of 0% interest but has a slightly lower APR thereafter of 18.9%.
Best cash back credit cards
You’ll be familiar with the cashback concept, where you earn rewards in the form of money or credit on your account when you spend. You must shop around as the “earn rate” varies, while some cards affiliated to a brand reward more for spending with that brand.
Further, there may be beneficial earn rates for an introductory period, while rewards might increase once you’ve crossed over a spending threshold. The financial services site Finder.com places an American Express card at the top of its list of the best.
- American Express Platinum Cashback Everyday Card gives a whopping 5% on £1 to £2,500 of yearly spend for an introductory three months, then 1% on £1 to £10,000 of yearly spend, and 1.25% on a yearly spend over £10,000. But it does come with a 28.2% representative APR.
- smile Classic Credit Card Visa offers a more straightforward 0.25% after £1 spent. Cashback is paid monthly into the card account.
- First Trust Bank (NI) Visa/Mastercard Option 1 offers 0.5% but after £5,000 of yearly spend. There’s a 12 transaction minimum, and the cashback is limited to £250.
Best rewards credit cards
Reward credit cards are an easy way to earn hundreds of pounds in bonuses, just for your normal spending. But while some offers look valuable, you might be paying through the nose in interest fees. Also, consider whether the rewards offered are worthwhile to you. According to Money Saving Expert, the top “close to cashback” deals (non-cash) are:
- Amex Preferred Rewards Gold offers 20,000 rewards points if you spend £2,000 in the first three months, which equates to £100 in high street vouchers or frequent flyer points. Plus, you get two free airport VIP lounge visits. But pay off your balance each month to avoid interest.
- Amex Rewards is best if you don’t spend as much. Spend £1,000 in the first three months for half the bonuses you get for the Preferred Rewards Gold card.
- Sainsbury’s Nectar Dual is regarded as the best credit card for supermarket shopping – so long as you like Sainsbury’s. Give your Nectar card number on the application and get 750 bonus Nectar points worth £3.75 every time you spend £35 or more instore or online.
Best credit building credit cards
If you need to build your credit rating, a credit card is a powerful weapon. The best options will boost your rating while exposing you to the minimum risk in terms of credit limits. However, the flip side is these cards attract a higher representative APR.
- Aqua Classic with 0% Purchase Offer tops the list for best credit building cards on money.co.uk. With a minimum credit limit of £250 and a maximum of £1,200, but this can be increased after four monthly statements. After a six-month 0% purchase offer, it’s a hefty 34.9% APR, so it pays to settle your balance each month.
- Barclaycard Forward Credit Card has the same maximum credit limit but a minimum of just £150. This card is not available to existing Barclaycard holders.
- Aqua Advance Card £250 to £1,200 credit limit and offers no fees on purchases abroad, so ideal for your holidays.
Best Air miles credit cards
Bag yourself free travel simply by spending on your credit card. But select your card carefully as only some offer air miles, and some are more generous than others. According to Travel the Globe For Less, the best options are:
- American Express Gold or Platinum cards both offer bonus points at sign-up, and then generous points per £1 spend which can be transferred to travel if booked through AMEX travel. The card fee is waived in year one, so go elsewhere or be prepared to fork out in year two (£450 for the Platinum card!).
- British Airways American Express Premium Card offers generous points and a companion voucher when you spend £10,000 in a year, meaning you get to take a friend! Some people are turned off by the £175 fee and would prefer a Visa or Mastercard option.
- Virgin Atlantic Credit Card rewards 5,000 Flying Club miles after the first purchase, then 0.75 miles per £1 spent. No annual fee but the companion voucher is not as generous as BA.
Best commercial credit cards
Savvy businesses who need to use credit cards to fund purchases will clearly look for the lowest interest offerings. According to money.co.uk the best three options, which also help you separate business from personal purchases, for low interest are:
- Metro Bank with just 12.3% variable on purchases, which is excellent. And there’s no annual fee
- HSBC Commercial Card has a 15.9% variable rate and no annual fee in year one. It’s £32 thereafter.
- Clydesdale Bank Business Card comes in at 16.9% variable, no fee in the first year but £28 after year one.
Best money transfer credit cards
Using a credit card to pay off your expensive bank overdraft (or another loan) makes total sense when you can do so interest-free. Therefore, look for a card that has the longest 0% money transfer period and pay off as much as you can from the card quickly. Love Money has a good guide to the best money transfer cards:
- HSBC 32 Month Balance Transfer Card has, you guessed it, 32 months interest-free with a low transfer fee of 1.4%. That’s good value.
- MBNA Platinum 28 Month Money Transfer Visa is 28 months interest-free with a 2.99% fee.
- Tesco Bank Money Transfer Mastercard is also 28 months without interest but has a slightly higher 3.94% fee, meaning you pay £39.40 for each £1,000 moved.
Best student credit cards
It’s harder for students to get credit than most because they generally have little or no credit history and get by on no or little income. Typically, the spending limit on student credit cards will be between £250 and £1,000.
The top three cards for students, according to The Motley Fool, are:
- HSBC Student Credit Card offers no thrills, but a competitive APR. The student must be enrolled on a qualifying course or apprenticeship.
- NatWest Student Credit Card is a Mastercard credit card with no annual fee. Holders must have a NatWest student current account.
- RBS Student Credit Card is another Mastercard credit card, also with no annual fee. Holders need an RBS student current account.
Best travel credit cards
Don’t get hit by high fees when using your credit card abroad. Look for a credit card that offers no fees on foreign transactions and preferably some rewards as well. Moneysaving Expert lists these credit cards best for travel use:
- Barclaycard Platinum Cashback has no fees on spending OR cash withdrawals overseas. There’s also a handy 0.25% cashback on your spending until the summer of 2023. Unfortunately, existing Barclaycard customers won’t be allowed this card.
- Tandem has no fees for holiday spending or cash withdrawals so long as you repay in full every month. There’s a generous 0.5% cashback on spending at home and abroad.
- Halifax Clarity is interest-free on foreign spending so long as you settle-up in full each month. You do get charged interest on cash withdrawals until you pay, so if you can, do so via online banking while abroad.
Best credit cards for bad credit
When you have a poor credit score, perhaps because of bankruptcy or some form of previous default, you can begin to rebuild your score using these cards, recommended by the Motley Fool:
- Aqua Advance Credit Card, like all other Aqua cards, is a good way to build your credit history. What makes this top of the pops is that by keeping up your payments your APR could fall 5% each year, down to 19.9%.
- Aqua Classic Credit Card has no annual fee and a credit limit of £1,200. Aqua also helps you understand and monitor your credit score. Credit limits increase if you keep up with payments.
- Marbles Credit Card has a high APR with a representative rate of 34.9% and few bells and whistles, but it does get you on the road to recovering your credit score. There’s no annual fee.
Best low-interest credit cards
If you can do without interest-free introductory offers but want a consistently low-interest rate over the longer term, uSwitch recommends these three low-interest credit cards, all with 6.4% APR but no interest-free balance transfers or introductory purchases:
- Lloyds Bank Platinum Low Rate Credit Card might also act as a second credit card.
- Halifax FlexiCard Credit Card offers no fee on balance transfers for the first 90 days, like the other two cards here.
- Bank of Scotland Online Low Rate Credit Card is similar to the other two, and like them, you’ll need a good credit rating to be accepted.
Best Business Credit Cards
More and more companies are turning to corporate credit cards as a way of streamlining their buying process. For many employees, spending money will be part of their day-to-day tasks and, with a corporate credit card, they can avoid the hassle and the paperwork that goes along with submitting expense claims. Alternatively, a good corporate credit card can help small business owners to manage their cash flow. With that in mind, we’ve taken a look at the top three corporate credit card deals currently available.
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Simon Young was a journalist for 20 years, becoming a news editor on national newspapers including the Sunday Express. He went on to lead the teams at one of the world’s largest online companies before setting up Magic Word Media.