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Which credit cards are the best?

With a wide range of credit cards available, it can be challenging to find the best one. Different cards, of course, have various strengths and weaknesses.

Some cards, for example, provide consumers with the opportunity to pay 0% interest on balance transfers for a period of time. Others offer rewards and/or cashback for spending on a variety of goods and services. Similarly, some cards are cheaper to use abroad than others, which could reduce your costs significantly each year.

As such, the best credit card for one individual may not necessarily be the best for another. Which card is most suitable depends on a variety of personal circumstances. With that in mind, the following three areas may be relevant in helping you to find the credit card that best fits with your circumstances and spending habits.

In need of a balance transfer?

For individuals who have existing credit card debt, a balance transfer card could be highly attractive. Such a card offers a 0% interest period on existing debt, which could last for up to 32 months. This could save a significant sum of money in interest payments.

For example, a consumer with existing debt of £3,000 on a credit card paying £150 per month at an interest rate of 18.9% could save £570 in interest payments. The debt would also be paid off four months earlier than it otherwise would have done, assuming the person continues to make a payment of £150 per month.

Although there are often balance transfer fees, they are usually significantly less than the interest payments that are avoided through using a balance transfer card. For instance, in the previous example a balance transfer fee of £90 (3% of the amount transferred) is considerably less than the potential £570 saving in interest payments.

International usage

For individuals who want to use their credit card while abroad, it may be worth having a card that does not charge non-sterling transaction fees. A non-sterling transaction fee – which you often find on credit cards that are not aimed at the travel segment – can be around 3% per transaction and may add up to significant amounts of money, even during an annual holiday. Cards that do not charge non-sterling transaction fees are likely to be even more appealing to individuals who often travel internationally.

Since many cards that do not charge a non-sterling transaction fee also have no annual fee, they could even be utilised as a second credit card that is used exclusively when abroad. Are these ‘all the time’ cards though? There may be no harm in that, however, using such cards for day-to-day shopping may not provide consumers with the opportunity to maximise their rewards or cut the amount of interest they pay on existing debt, for example.

Banking those sweet rewards

For consumers who want to earn rewards on their spending, a credit card that offers vouchers or cashback may be the best option.

For individuals who desire a relatively simple rewards scheme, cashback could be a worthwhile option: an amount is simply deducted from your credit card bill on a regular basis, often annually.

Some individuals who shop at specific stores may want to consider a card that offers a more generous reward scheme at particular retailers. Some credit cards offer bonuses for consumers who have a current account with the bank in question. Therefore, shopping around and considering where you spend most of your money each month could be worthwhile when deciding which credit card suits you best.

Verdict

Deciding which credit card is the ‘best’ comes down to your own financial situation as well as where you intend to spend a significant proportion of your monthly outgoings.

For individuals with existing debt, a balance transfer card could have the biggest positive impact on their financial circumstances. Similarly, regular international travellers may prefer a card that avoids a non-sterling transaction fee. And with reward cards offering a variety of different offers, it could pay to shop around and find the card that matches your own personal circumstances best.

Though ‘best’ is a personal matter when it comes to credit cards, we’ve attempted to round up the top offers out there in our list of the best credit cards for 2019.

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