The credit-card market is full of different offers and attractions to tempt in customers. And while it may seem simplest just to take the first card offered to you by your bank, there are often better offers out there to suit your circumstances, including specialised products to match specific requirements.
Compare What’s Available
Go to Money Supermarket to review the current range of cards available and see what the deals are. You can filter the best buys using different criteria, such as lowest interest rate, special offers and other factors that may be of interest to you. One thing you’ll notice is that some cards are designed for specific purposes.
These are ideal for people who pay off their balance in full every month and never accrue interest. Basically, every time you spend on one of these cards you receive a small amount of cash back on that purchase. It can be anything from 0.25% to 3% for a limited period.
Just check the terms and conditions carefully. Some cashback cards will offer the cash back at a lower percentage for the duration of the card’s use, while others will offer higher rates but for shorter promotional periods.
If you’re likely to buy a lot over a short period (and pay the balance off in full), such as in the run up to Christmas, during a holiday or to do up a house you’re moving into, the higher rate for the shorter timeframe may be ideal for you. Check if there are any maximum cashback limits and then compare the best cashback cards across the market.
These cards are for people who already have a credit balance and who are paying high amounts of interest on it. These balances may be held across a number of cards at different interest rates. The balance-transfer card allows you to switch all your existing balances on to one single card, making it easier to manage.
The interest rate may then be 0% for a promotional period of up to a year or even more in some cases, or it may be a low-rate ‘life of balance’ card which allows you to pay off the balance in stages, with interest accruing at a manageable rate. Just be very careful not to buy additional things with this card, as the promotional rate won’t apply to new spending.
These are often affiliated to supermarkets with points schemes, airlines with frequent-flyer miles or other benefits that you can accrue simply by doing your spending on that credit card. These are useful if you’ll use the benefits but check that the underlying offer is genuinely competitive.
These cards offer a small percentage of your spending as a donation to the sponsored charity. Check the small print very carefully, though and work out whether it’s the right way to donate for you or whether you’d be better using a low interest rate regular card and donating your money personally. Always work out the underlying costs and charges.