The Best Credit Cards for 2019

Updated: 16th August, 2019.

Our team has compared piles of credit cards to figure out which are the best credit cards in the UK… and which are “the rest”. Below you’ll find our shortlist of the top deals currently out there, so you can compare cards and choose the one that’s best for you.

We’ve searched the UK credit card market, and reckon these are some of the best deals around today. So take a look at our shortlist of the best credit card deals – for 0% credit, balance transfer, travel, cashback, rewards and more. Here are MyWalletHero’s picks for the best credit cards.

Great for: Everyday cash back with no fee
5 stars question mark
Apply Now!

On American Express's Secure Website

Cashback rewards are hard to come by these days, but if that’s what you’re looking for, the American Express Cashback Everyday Credit Card may be a good bet. The standard cashback yield is 0.5%, but for those that spend more than £5,001, that bumps up to 1%. New cardholders also get a bonus of 5% cashback over the first three months, which maxes out at £100. Its sister card offers a bigger welcome bonus and higher cashback, but the Everyday Credit Card has the advantage of no fee.

Read full review >

CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • 5% cashback for first 3 months (up to £100, subject to eligibility)
  • 0.5% cashback after first 3 months (if you spend £1 to £5,000)
  • 1% cashback after first 3 months with spending above £5,001
  • Note that you must spend at least £3,000 to earn any cashback
  • No annual fee
  • No cap on cashback earned
  • Travel accident insurance (subject to enrolment) and global assist services
  • Access to special offers from American Express offers

REPRESENTATIVE EXAMPLE

Representative APR 22.9% APR variable
Annual fee Based on £0
Credit Limit Assumed credit limit of £1,200
Purchase Rate 22.9% variable for purchases

what we like

  • 5% cashback for first 3 months (up to £100, subject to eligibility)
  • 0.5% - 1% cashback after first 3 months, depending on spend
  • No annual fee
  • No cap on cashback earned
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    22.9%
  • INTRO OFFER:

    5% cashback for first 3 months (up to £100)

KEY SCORES:

  • 4/5 Perks
  • 5/5Fees
  • 2.5/5APR

HIGHLIGHTS

  • 5% cashback for first 3 months (up to £100, subject to eligibility)
  • 0.5% cashback after first 3 months (if you spend £1 to £5,000)
  • 1% cashback after first 3 months with spending above £5,001
  • Note that you must spend at least £3,000 to earn any cashback
  • No annual fee
  • No cap on cashback earned
  • Travel accident insurance (subject to enrolment) and global assist services
  • Access to special offers from American Express offers

REPRESENTATIVE EXAMPLE

Representative APR 22.9% APR variable
Annual fee Based on £0
Credit Limit Assumed credit limit of £1,200
Purchase Rate 22.9% variable for purchases
Great for: Earning rewards, low interest rate
5 stars question mark
Apply Now!

On American Express's Secure Website

This card offers the enticing combination of a competitively low APR alongside reward points. The APR sits among the lowest available on the market, and then there is the added bonus of access to the American Express Membership Rewards programme. The deal is further sweetened for new cardmembers with a welcome award of 2,500 points (subject to minimum spend and eligibility), giving them a much appreciated boost to starting to earn rewards. This all comes with no annual fee attached.

Read full review >

CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • Welcome award of 2,500 points subject to eligibility and minimum spend of £1,000 in first three months
  • Low APR
  • 1 Membership Rewards point for every full £1 spent
  • No annual fee
  • Travel accident insurance up to £150,000 (subject to enrolment)
  • Further array of American Express services including Purchase Protection (subject to enrolment) and American Express Experiences

REPRESENTATIVE EXAMPLE

Representative 9.9% APR (variable)
Purchase rate 9.9% p.a. (variable)
Assumed credit limit £1,200
Annual fee £0

what we like

  • Welcome award of 2,500 points (subject to eligibility and qualifying spend)
  • Low APR
  • 1 Membership Rewards point for every full £1 spent
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    9.9%
  • INTRO OFFER:

    2,500 Membership points if you spend £1,000 in the first 3 months (subject to eligibility)

KEY SCORES:

  • 5/5 Perks
  • 3/5Fees
  • 5/5APR

HIGHLIGHTS

  • Welcome award of 2,500 points subject to eligibility and minimum spend of £1,000 in first three months
  • Low APR
  • 1 Membership Rewards point for every full £1 spent
  • No annual fee
  • Travel accident insurance up to £150,000 (subject to enrolment)
  • Further array of American Express services including Purchase Protection (subject to enrolment) and American Express Experiences

REPRESENTATIVE EXAMPLE

Representative 9.9% APR (variable)
Purchase rate 9.9% p.a. (variable)
Assumed credit limit £1,200
Annual fee £0
Great for: 0% Purchases and Rewards
5 stars question mark
Apply Now!

On American Express's Secure Website

While it may not have the longest interest-free period available, this card does offer 18 months at 0% on purchases for new cardmembers (subject to eligibility). This is in addition to American Express perks such as the Membership Rewards scheme and fraud protection. All this with the bonus of no annual fee and no qualifying spend, meaning you can really make your money work for you with this card.

Read full review >

CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • One Membership Rewards point per £1 spent
  • 0% on purchases for 18 months (subject to eligibility)
  • No annual fee
  • Travel accident insurance up to £150,000 (subject to enrolment)
  • Purchase protection for up to £2,500 on items purchased on the card and stolen or damaged within 90 days, plus refund protection up to £200

REPRESENTATIVE EXAMPLE

Representative 22.9% APR (variable)
Purchase rate 22.9% p.a. (variable)
Assumed credit limit £1,200
Annual fee £0

what we like

  • One Membership Rewards point per £1 spent
  • 0% on purchases for 18 months (subject to eligibility)
  • No annual fee
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    22.9%
  • INTRO OFFER:

    0% on purchases for 18 months (subject to eligibility)

KEY SCORES:

  • 4/5 Perks
  • 3/5Fees
  • 2/5APR

HIGHLIGHTS

  • One Membership Rewards point per £1 spent
  • 0% on purchases for 18 months (subject to eligibility)
  • No annual fee
  • Travel accident insurance up to £150,000 (subject to enrolment)
  • Purchase protection for up to £2,500 on items purchased on the card and stolen or damaged within 90 days, plus refund protection up to £200

REPRESENTATIVE EXAMPLE

Representative 22.9% APR (variable)
Purchase rate 22.9% p.a. (variable)
Assumed credit limit £1,200
Annual fee £0
Great for: Long 0% purchase and balance transfer, plus points
4.5 stars question mark
Apply Now!

On M&S Bank's Secure Website

The M&S Shopping Plus credit card ticks a lot of the boxes to make a great credit card. For starters, there’s a long 20-month 0% period on new purchases. But you can add to that a 20-month, 0% period for balance transfers made in the first 90 days and the M&S points programme. It is worth noting that there’s a 2.9% fee on balance transfers.

Read full review >

CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • 0% interest on purchases for the first 20 months
  • 0% interest for 20 months on balance transfers made in the first 90 days
  • 2.9% balance transfer fee
  • Earn M&S points for shopping at M&S and elsewhere
  • Bonus points voucher for 500 M&S points (worth £5 at M&S) mailed with new card

REPRESENTATIVE EXAMPLE

Representative rate 19.9% APR (variable)
Purchase rate 19.9% p.a. (variable)
Assumed credit limit £1,200

what we like

  • 0% interest on purchases for the first 20 months
  • 0% interest for 20 months on balance transfers made in the first 90 days (2.9% fee applies)
  • Earn M&S points for shopping at M&S and elsewhere
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    19.9%
  • INTRO OFFER:

    0% interest on purchases for 20 months
    0% interest on balance transfers for 20 months

KEY SCORES:

  • 4/5 Perks
  • 3/5Fees
  • 4/5APR

HIGHLIGHTS

  • 0% interest on purchases for the first 20 months
  • 0% interest for 20 months on balance transfers made in the first 90 days
  • 2.9% balance transfer fee
  • Earn M&S points for shopping at M&S and elsewhere
  • Bonus points voucher for 500 M&S points (worth £5 at M&S) mailed with new card

REPRESENTATIVE EXAMPLE

Representative rate 19.9% APR (variable)
Purchase rate 19.9% p.a. (variable)
Assumed credit limit £1,200
Great for: Really long balance transfer period
4.5 stars question mark
Apply Now!

On M&S Bank's Secure Website

The M&S Transfer Plus card gives you a very long 28 months of 0% interest on balances transferred in the first 90 days. Users will have to cough up a balance-transfer fee of 2.85% though. Balancing that out, the M&S Transfer Plus also offers 0% for 6 months on purchases and M&S rewards on all purchases.

Read full review >

CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • 0% interest for 28 months on balances transferred in the first 90 days (2.85% fee applies)
  • 0% interest on purchases for 6 months
  • M&S rewards points at M&S and elsewhere

REPRESENTATIVE EXAMPLE

Representative rate 19.9% APR (variable)
Purchase rate 19.9% p.a. (variable)
Assumed credit limit £1,200

what we like

  • 0% interest for 28 months on balances transferred in the first 90 days (2.85% fee applies)
  • 0% interest on purchases for 6 months
  • M&S rewards points at M&S and elsewhere
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    19.9%
  • INTRO OFFER:

    0% on balance transfers for 28 months, available for 90 days from account opening
    0% on purchases for 6 months

KEY SCORES:

  • 4.5/5 Perks
  • 2.5/5Fees
  • 2.5/5APR

HIGHLIGHTS

  • 0% interest for 28 months on balances transferred in the first 90 days (2.85% fee applies)
  • 0% interest on purchases for 6 months
  • M&S rewards points at M&S and elsewhere

REPRESENTATIVE EXAMPLE

Representative rate 19.9% APR (variable)
Purchase rate 19.9% p.a. (variable)
Assumed credit limit £1,200
Great for: Low APR and no foreign transaction fees
4 stars question mark
Apply Now!

On NatWest's Secure Website

Where the NatWest Credit Card excels is being that solid, take-everywhere card. With a low standard APR and no foreign transaction fees, this card can find a place in many peoples’ wallets. However, if you’re looking for rewards, cashback or a sign-up bonus, you’ll have to look elsewhere.

Read full review >

CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • Low APR of 9.9% for qualified applicants
  • No fees on foreign transactions
  • No balance-transfer fees
  • Even lower balance-transfer rate of 6.9% for qualified applicants
  • No annual fee
  • To apply, you must be 18+, earning at least £10,000 per year and a UK resident

REPRESENTATIVE EXAMPLE

Purchase rate 9.9% p.a. (variable)
Representative APR 9.9% (variable)
Assumed credit limit £1,200
Annual fee £0

what we like

  • Low standard APR
  • No foreign-transaction fees
  • No balance-transfer fees
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    9.9%
  • INTRO OFFER:

    N/A

KEY SCORES:

  • 1/5 Perks
  • 5/5Fees
  • 5/5APR

HIGHLIGHTS

  • Low APR of 9.9% for qualified applicants
  • No fees on foreign transactions
  • No balance-transfer fees
  • Even lower balance-transfer rate of 6.9% for qualified applicants
  • No annual fee
  • To apply, you must be 18+, earning at least £10,000 per year and a UK resident

REPRESENTATIVE EXAMPLE

Purchase rate 9.9% p.a. (variable)
Representative APR 9.9% (variable)
Assumed credit limit £1,200
Annual fee £0
Great for: Long 0% interest on purchases and rewards
5 stars question mark

The Sainsbury’s Dual Offer Credit Card aims to give you the best of both worlds — cardholders get a long 24 months with 0% interest on both purchases and balance transfers. Balance transfers are subject to a 3% fee, so those looking primarily for a balance-transfer offer may prefer to find a card without that fee. As with other Sainsbury’s cards, cardholders collect Nectar points on spending at Sainsbury’s and elsewhere. Over the first two months, shopping at Sainsbury’s could net users up to 7,500 bonus points, which is worth £37.50.

Read full review >

CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • 0% interest on purchases made over the first 24 months
  • 0% interest on balance transfers for 24 months (but a 3% fee applies)
  • Up to 7,500 bonus Nectar points over first 2 months

REPRESENTATIVE EXAMPLE

Purchase rate is 20.95%
p.a. variable
With a representative 20.9% APR
variable
Assumed Credit limit: £1,200

 

what we like

  • 0% interest on purchases made over the first 24 months
  • 0% interest on balance transfers for 24 months (but a 3% fee applies)
  • Up to 7,500 bonus Nectar points over first 2 months
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    20.9%
  • INTRO OFFER:

    0% on purchases for 24 months
    0% on balance transfers for 24 months

KEY SCORES:

  • 5/5 Perks
  • 5/5Fees
  • 1/5APR

HIGHLIGHTS

  • 0% interest on purchases made over the first 24 months
  • 0% interest on balance transfers for 24 months (but a 3% fee applies)
  • Up to 7,500 bonus Nectar points over first 2 months

REPRESENTATIVE EXAMPLE

Purchase rate is 20.95%
p.a. variable
With a representative 20.9% APR
variable
Assumed Credit limit: £1,200

 

Great for: Rewards, balance transfers and 0% purchases
5 stars question mark

The John Lewis Partnership Credit Card is an appealing rewards card for consumers who shop regularly at Waitrose or John Lewis. Cardholders get 1 point for every £1 in spend at John Lewis and Waitrose and 1 point for every £2 spent elsewhere. It also has a balance transfer offer (18 months), a 0% introductory interest rate on new purchases (9 months), and you get all of this without having to dole out an annual fee.

Read full review >

CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • 1 point for every £1 spent at John Lewis and Waitrose, 1 point for every £2 spent elsewhere
  • 0% interest for 18 months on balance transfers
  • 0% interest for 9 months on purchases
  • No annual fee
  • Special offers to boost your rewards points

REPRESENTATIVE EXAMPLE

Representative rate 18.9% APR (variable)
Purchase rate 18.9% p.a. (variable)
Based on borrowing £1,200

what we like

  • 1 point for every £1 spent at John Lewis and Waitrose, 1 point for every £2 spent elsewhere
  • 0% interest for 18 months on balance transfers
  • 0% interest for 9 months on purchases
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    18.9%
  • INTRO OFFER:

    18 months 0% on balance transfers
    9 months 0% on purchases

KEY SCORES:

  • 4/5 Perks
  • 3/5Fees
  • 5/5APR

HIGHLIGHTS

  • 1 point for every £1 spent at John Lewis and Waitrose, 1 point for every £2 spent elsewhere
  • 0% interest for 18 months on balance transfers
  • 0% interest for 9 months on purchases
  • No annual fee
  • Special offers to boost your rewards points

REPRESENTATIVE EXAMPLE

Representative rate 18.9% APR (variable)
Purchase rate 18.9% p.a. (variable)
Based on borrowing £1,200
Great for: No foreign transaction fees plus 0% interest offers
4.5 stars question mark
Virgin Money Credit Card

This card charges no fees for overseas use, so making spending abroad more affordable, plus it offers 12-month interest-free introductory periods for purchases and balance transfers, so that you can pay for your holiday in the first place. Add to that travel discounts for Virgin Holidays and the offer of cashback on travel insurance, and you have a good all-round travel package.

Read full review >

CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • No foreign transaction fees
  • 0% interest for 12 months on purchases
  • 0% interest for 12 months on balance transfers

REPRESENTATIVE EXAMPLE

Representative rate 21.9% APR (variable)
Purchase rate 21.9% p.a. (variable)
Based on borrowing £1,200

what we like

  • No foreign transaction fees
  • 0% interest for 12 months on purchases
  • 0% interest for 12 months on balance transfers
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    21.9%
  • INTRO OFFER:

    12 months 0% interest on balance transfers and purchases

KEY SCORES:

  • 5/5 Perks
  • 5/5Fees
  • 3/5APR

HIGHLIGHTS

  • No foreign transaction fees
  • 0% interest for 12 months on purchases
  • 0% interest for 12 months on balance transfers

REPRESENTATIVE EXAMPLE

Representative rate 21.9% APR (variable)
Purchase rate 21.9% p.a. (variable)
Based on borrowing £1,200
Great for: Getting cash back while building credit
5 stars question mark
Aqua Classic

Building your credit is much sweeter when you’re getting cashback rewards at the same time. The aqua reward Cashback Credit Card can help those looking to build or rebuild their credit, and at the same time, cardholders earn 0.5% cashback on their spending (up to £100 per year). There’s also no fee on spending abroad, a very nice feature if you like to travel.

Read full review >

CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • 0.5% cash back on purchases up to £100 per year
  • Initial credit limit £250-£1,200
  • Could help build or rebuild credit
  • No foreign transaction fees

REPRESENTATIVE EXAMPLE

Interest rate for purchases 34.95% p.a. variable
Representative 34.9% APR variable
If you borrowed (over 12 months) £1,200

what we like

  • 0.5% cash back on purchases up to £100 per year
  • Initial credit limit £250-£1,200
  • Could help build or rebuild credit
  • No foreign transaction fees
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    34.9%
  • INTRO OFFER:

    N/A

KEY SCORES:

  • 5/5 Perks
  • 5/5Fees
  • 3/5APR

HIGHLIGHTS

  • 0.5% cash back on purchases up to £100 per year
  • Initial credit limit £250-£1,200
  • Could help build or rebuild credit
  • No foreign transaction fees

REPRESENTATIVE EXAMPLE

Interest rate for purchases 34.95% p.a. variable
Representative 34.9% APR variable
If you borrowed (over 12 months) £1,200

How we picked the 2019 credit card winners

We’re here to help you make the most of your money and crush the financial roadblocks in your way. As we review credit cards, we keep this in mind, and look for cards that offer the best combination of as many benefits as possible. Specifically, our ratings reflect:

  • Annual Fees – When there’s an annual fee, that comes directly out of your pocket. If there are great features in exchange for that fee, great. Otherwise, our favorite annual fee is £0.
  • Introductory 0% interest offers – These offer give you 0% interest on purchases or balance transfers (or both!). They could help you get out of debt faster or allow you to spread the cost of large purchases.
  • Interest rates – Representative APRs that are as low as possible.
  • Rewards and cashback – These allow you to rack up points or cashback for just swiping your credit card.
  • Sign-up bonuses – These give you an extra boost at the beginning!
  • Tools and extra perks – These features include access to your credit rating, fee-free Travel Money, and no non-sterling transaction fees. They help you manage your finances better or save you money.

WHY YOU CAN TRUST US

Call us crazy, but we love this stuff. We love sniffing out the best credit card deals on the market and bringing them to our readers. For more than two decades, our parent company, The Motley Fool, has been helping people around the world improve their financial lives. And that’s exactly what MyWalletHero aims to further. Together with our colleagues in the US, we’ve collectively analyzed hundreds of card offers on more than 6,000 data points, reading through the small print to find the very best credit cards the market has to offer.

Types of credit cards

You may see credit cards talked about in many different ways. It can get a bit confusing after a while. But at the end of the day, what we’re really talking about are five primary categories of credit cards. In fact, when you’re looking for a new credit card, it’s usually smart to step back and start by considering which feature is most important for you.

Let’s take a look at those five main types of credit cards:

  • 0% credit cards — These cards come in two main flavors: balance transfer cards and 0% purchase cards. But the basic selling point is the same. Namely, an extended period of time where you pay 0% interest on a carried credit-card balance. With a balance transfer card, you’re able to transfer debt from another credit card to the new one, and then benefit from an extended period of 0% interest on that balance. With a 0% purchase card, you get an extended period of time where you pay 0% on new debt that you accrue through purchases on the card. The best cards in this category can give you more than two years of 0%. The benefit can be great in terms of savings on interest.
  • Cashback cards — With a cashback card you get exactly what the name implies: cash… back. Most of these cards are structured to give you a certain percentage of your spending back in cold, hard cash. Right now in the UK market, getting a 1% or higher cashback rate is good, and lower than 1% is very common, and although not great, can still add up. Cashback card offers sometimes get a boost from introductory offers that put near-immediate cash in your pocket. Be aware that some cards that call themselves “cashback” don’t truly give you cash, but rather vouchers that often have to be spent in certain stores. If you already shop at those stores that can be fine, but otherwise it puts a dent in the value of the card.
  • Rewards cards — Rewards cards typically accrue rewards in terms of points or miles for every £1 you spend and can be redeemed for spending vouchers, flights, hotels, and more. Points-based rewards credit cards are often tied to specific retailers, making them a great choice for shoppers who frequent that retailer. Travel-focused rewards cards also often have other benefits (such as no foreign transaction fees when used abroad or access to no-fee Travel Money) that 0% APR cards and cashback cards are less likely to have. Frequent travelers, especially international travelers, would be wise to have a travel credit card, even if only for the benefit of avoiding foreign transaction fees.
  • Credit-building cards — There are two primary circumstances that might have you looking at credit-building cards. You may be brand new to credit and not have a credit history. Or you may have hit a pothole on the great financial highway and are trying to rebuild your credit. In either case, issuers that offer credit-building cards are willing to offer cards to individuals that have low credit scores or very little credit history to speak of. That comes with a significant tradeoff, as these cards almost always have an APR that’s far higher than cards aimed at individuals with good credit. Credit-building cards also usually don’t come bundled with benefits like 0% intro APRs or rewards. However, that’s not always the case, and if you do your research, it’s possible to find credit-building cards that have nice benefits. The biggest benefit of all with these cards is right in the name: credit building. For those that use these cards responsibly, the result could be an increased credit score that can help them score a great 0% credit card or a fun rewards card. Student cards could be considered part of this category, since students typically have little to no credit history.
  • Business cards — No surprise that these cards are aimed at business owners. Generally, they have higher credit limits to support usage in high-spending business contexts. For business owners that want to draw a clear line between their business and personal spending, these cards can be a good choice. They can likewise be helpful when you want to be able to give cards to multiple people within your company. Business credit cards can also be a way for businesses to start a financial relationship with a bank that may be able to help the business with other financing needs as the business grows.

Here’s why a credit card can be so useful

If you’re wondering why you might want a credit card in your wallet, consider that this is more than just a (quick) way to pay for things at the grocer (though that’s pretty useful already!). Nor is it just a way to easily borrow money. In fact, thanks to the APRs on most credit cards, if borrowing money is what you’re after, you’re usually best off looking elsewhere.

Indeed, beyond these two obvious aspects of credit cards — payment and borrowing — there are quite a few ways that they can benefit you:

  • They can benefit your credit score — There are myriad ways your credit score can come into play. Obviously, when you want to apply for a credit card. But also when you’d like to borrow money for a new car, a house, or basically any other large purchase. It helps to have a rock-solid credit score so that when the time comes that you need to borrow, banks will see you as a worthy lender. When you use credit cards responsibly, that good behavior gets reported to the credit rating agencies by the card issuer and can help increase your credit score. This can be the case whether you already have a good credit score and would like to make it a great credit score, or if you have a poor credit score or little credit history, and would like to build to a better score.
  • Protection against fraud — Wouldn’t it be nice if we lived in a world where we didn’t have to worry about this? Maybe one day. Until then, using a credit card can protect you against the shady characters out there that have bad intentions for your money. In most cases of fraud, credit-card companies have your back and you won’t be on the hook for charges that fraudsters rack up. The same can’t always be said if someone gets hold of your debit card or bank account information.
  • You can get rewarded — Rewarded for what? Rewarded for doing the spending that you would do anyway! Look, credit cards need to be used responsibly, so this isn’t an excuse to get crazy you’re your spending. But many cards offer rewards in the form of points or cashback that give a percentage of your spending back to you. And it’s hard to argue with getting handed cash or rewards.
  • And then… the “little things” — Many cards offer perks including no-fee Travel Money, purchase protection (in case a new toy gets stolen or damaged), and travel accident insurance. These may seem like “little things”, but for savvy spenders that take full advantage of them, it could mean hundreds of pounds of savings. Try getting a wad of cash to do that for you!

Comparing credit cards (and the secret formula to finding the best credit card!)

We’re kidding, of course. There’s no secret formula, and, to be frank, there’s not even one ‘best’ credit card. The reason is that everyone has their own particular financial circumstances. So what may be a great card for you, may be terrible for someone else.

When we talk about ‘best’ at MyWalletHero, what we’re talking about is best within the context of comparable cards. That is, we may call a credit-building card ‘best’ and even give it a five-star rating. But if you’ve got a solid credit rating the high APR and lack of benefits that credit-building card sports likely makes it a pretty darn bad pick for you.

Figuring out ‘best’ for yourself goes back to what we talked about earlier — understanding the different types of cards, and deciding which type of card (which primary feature) best fits your circumstances.

Here are a few examples of how you can find the card that’ll be the best fit for you:

  • If you have great credit and want to take advantage of the benefits of credit cards, then… Consider rewards or cashback cards. You generally need a good credit score to qualify for worthwhile rewards and cashback cards, and if you clear that hurdle, you can start banking points, miles or cash, often for doing the spending you’d be doing anyway.
  • If you have good credit and are paying high interest on a credit-card balance, then… A balance transfer card might be right up your alley. For qualified applicants, balance transfer cards can offer multiple years of no interest payments. An average APR these days is around 19%, so you can imagine the savings can be steep when swapping that out for 0%!
  • If you’re about to make a big purchase, then… Take a look at 0% purchases credit cards. These cards typically offer a year or more of 0% interest on new purchases and can help spread the cost of a large purchase (or a series of purchases) over a longer period of time.
  • If you just got through a tough financial patch, but are trying to get back on track, then… A credit-builder card may fit your needs. Issuers of credit-builder cards accept applicants with less-than-stellar credit (often, much less than stellar). In return, cardholders have the chance to showcase their financial responsibility and potentially see their credit score start to heal.
  • If you’re a frequent traveler, then… Look at travel-oriented cards. Many credit cards on the market charge as much as 3% on non-sterling transactions. Ouch! Cards aimed at travelers don’t have this fee. You may also find special deals on Travel Money or rewards that are oriented towards travel — like travel reward points.

Again, ‘best’ lies in the context that it’s used. For someone ideally looking for a cashback credit card, even the ‘best’ balance transfer card is unlikely to be a good match. And as great as the ‘best’ traveler credit card might be, if someone has poor credit, getting approved would be unlikely.

Comparing credit cards made easy

We get it. There are a lot of credit cards out there, and trying to decide can be challenging. Here are a few things that you can consider when trying to choose between cards.

Should you pay an annual fee for a credit card?

All things held equal, the answer is incredibly simple: avoid an annual fee. An annual fee is money that comes out of your pocket, and whether the card is giving you points, rewards, or other benefits, paying an annual fee reduces your benefit.

But things aren’t always equal, and cards with an annual fee may give you more points or more cashback. By doing some easy math, you can figure out whether a higher-earning card with an annual fee may be a better deal for you.

Imagine two credit cards. One has no annual fee and earns £0.005 cashback for every £1 spent. The second card earns 1p for every £1 spent but has a £30 annual fee. What we can do here is divide card two’s annual fee (£30) by the amount that its rewards rate exceeds card one’s rate (that is, £0.005). Which comes to £6,000. So if you spend more than £6,000 on your card annually, the higher earning rate for card two is the better deal, even though you’d pay an annual fee. If you spend less than that, you’re better off not paying the annual fee and going with the lower rewards rate.

If your plan is to spend heavily on a particular card and really rack up points or cashback, then an annual fee may well be worth it. If you ask us though, rarely does it make sense to carry two cards that sport an annual fee.

0% cards: balance transfer or 0% purchases?

What you need to keep in mind about a balance transfer card is that the 0% interest only applies to balances from other credit cards that you transfer to your new card.

So, for example, if you have a £2,000 balance on your current credit card and transfer that to a new balance transfer card, then the 0% balance transfer offer will apply to that balance. But, unless the card also has a 0% purchases offer, the 0% interest will not apply to new spending on that card.

That makes deciding between 0% balance transfer and 0% purchases relatively easy. If you have an existing balance on a card that you’re paying high interest on, you’re probably better off with a balance transfer card. If you’re more concerned with paying 0% interest for a period of time on new spend, then think 0% purchases.

There are cards that have both a 0% balance transfer and 0% purchases offer. These can be a good option if you have an existing credit card balance and you’d like a period of time with 0% interest on new spend. But these cards are usually easiest to manage when the introductory 0% periods are equal for the balance transfer and purchases offers.

Better bet: cashback or points?

The nice thing about cash is that it’s… well, cash. You can turn around and spend it on whatever you like. So if you’re looking for a safe choice between cashback and points, cashback will always be more flexible. But if you’re a frequent shopper at a particular retailer or retail group (like Tesco or Sainsbury’s), then earning and using points wisely could yield you even more than you could get with a cashback card. We just talked about annual fees above, but that’s worth noting here too. When comparing cashback or points cards be sure to deduct that annual fee from any rewards you’re expecting.

Cards for poor credit and credit-building cards

Let’s be honest here, when you’re in the process of building or rebuilding your credit there’s a better chance that you’re a bit skint. For that reason, we prefer credit-building cards and cards for those with poor credit that don’t carry extra fees. If you’re in a tough money spot, it’s better to avoid stacking extra fees on top of it all!

Expect that most credit cards available to those with poor or no credit will have much higher representative APRs than those for people with good or excellent credit. Even so, looking for the lowest APR that you can find is a good idea. Better still is to look for a card that offers a 0% introductory period for purchases or balance transfers. These aren’t common, but they are out there.

Bottom line: should you be using a credit card?

Though around 60% of adults in the UK have a credit card, they aren’t for everyone. As we’ve discussed here, there are some great benefits for using a credit card. It’s an easy way to pay for things. And you can rack up points or even get straight-up cash just for making purchases. But, if used irresponsibly, credit cards are also an easy way to get stuck under a big pile of debt.

Below is a checklist of sorts. Before taking out a credit card, you may want to tick down this list and make sure you can answer “yes” to all of these.

  • Can you use a credit card responsibly? — This isn’t a trick question! For some people, the urge to spend can be overwhelming. Combine that with easy access to borrowed money and high interest rates, and you could very quickly end up with crushing debt. If you’re thinking about taking out a credit card, be sure you can trust yourself to stay within reasonable spending limits.
  • Do you keep up on your bills? — Most credit-card companies don’t take kindly to being paid late. To be sure, there are grace periods for cardholders that pay on time most of the time. But if you have a habit of missing due dates on bills, then having a credit card could mean aggravating fees and extra interest. If you’re in a tough financial position, that can make it even though. But even if you’re in a good financial position, why put yourself in line to pay extra fees? Of course, if you’re typically on the ball and on time paying your bills, paying your credit card on time shouldn’t be any extra hassle.
  • Can you rely on your income source? — One of the reasons that a lot of people end up falling into debt is that they experience big swings in their income. During a lull in money coming in, they end up putting too much onto their credit card. Combine that with the interest that starts piling up, and it can be hard to claw your way back. Having predictable sources of income makes it much easier to consistently pay off your credit card and stay out of trouble.
  • Are you free of big purchases on the horizon? — While credit cards can be great for building your credit so that you can get approved for loans in the future, that doesn’t hold up if the loans you’re looking for are in the very near future. Applying for credit cards has the potential to ding your credit score, at least temporarily, so if you’re hoping to borrow to buy a car or finance a house in the near future, you may want to hold off on new credit cards.

FAQs about credit cards

What is a credit card?

A credit card is a payment card that includes a credit agreement with the card issuer. Unlike a debit card, which directly debits the associated bank account, a credit card builds a debt balance as you spend. This balance can (and, ideally, should) be paid off in full at the end of the month without incurring any interest charges. However, you may pay less than the full balance. In that case you’ll begin being charged interest on the balance.

How do credit cards work?

The bank that issues the card makes the payment to the merchant on your behalf, and tallies a debt balance for you. You have the option at the end each month to pay off your entire balance, or pay less than that and accrue interest on the remaining balance. In order to attract customers, many credit card issuers attach attractive offers to cards, such as long periods of 0% interest or rewards for everyday spend.

How do you get a credit card?

The first step is to find out what your credit score is, since that plays an important role in whether you’ll be accepted when you apply for a credit card. Once you know your score, you can determine whether it’s good enough to qualify you for the offers that require good or excellent credit, or if you might be better served applying for a credit-builder card that can help you build up your credit score. After this, look through the information on MyWalletHero to help figure out what type of card will best fit your needs. Only then — once you know what kind of card you’re likely to qualify for and have determined which type of card best fits your needs — should you actually apply for a card. To do this, you can use the links you see on MyWalletHero, visit a card issuer’s site directly or go to a local bank branch.

How do you cancel a credit card?

Normally, cancelling a credit card is a relatively simple process. The specifics vary from bank to bank, but you will usually have to call the credit card customer service line and tell them that you’d like to cancel your card. Often there is also an option to send a letter by post to inform the issuer that you’d like to close the account. Bear in mind that any balance that’s still due on the account will need to be paid off prior to closing the account. Closing a credit card can also hurt your credit score, so be sure to take that in consideration before closing your account.

Can you withdraw cash from a credit card?

In most cases, the answer is ‘yes’. But though you usually can withdraw cash from a credit card, the better question may be: Should you withdraw cash from a credit card? The answer to that is usually ‘no’. That’s because most credit cards not only charge a cash advance fee (typically 3%), but you’ll be charged interest starting from the day you take out the cash — as opposed to having until the end of the month, as is the case with most new purchases. This makes a cash advance on a credit card a fairly poor proposition. And introductory 0% periods usually don’t apply to cash advances.

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