A Quick Guide to Choosing a Credit Card
Back in 1966, when the first credit card was launched in the UK, choosing a credit card was a very simple affair - you took what you could get.
The range of cards available slowly grew over the following years, until an explosion of card launches over the last decade resulted in credit cards being available in a bewildering variety of styles and brands, each with different benefits and drawbacks.
In this article, we hope to give some advice to help you choose the right card for you.
If you have a large debt on another card
If you are keeping a large balance on your current card, or medium balances on more than one card, you should think about making a balance transfer on to a new card. Many cards offer a 0% interest rate for balance transfers, so you will be saving money by not paying any interest over the period of the introductory rate.
The savings can be considerable - for example, if you moved £5000 from a card with an interest rate of 17.9%, you would save £494.48 over 6 months with a 0% interest card.
If you pay your bill in full every month
If you use your card for convenience rather than borrowing - such as buying online or not having to carry cash - and pay off your bill every month, you should look for a card that rewards you in some way for using it regularly.
Some cards offer a loyalty program where you earn points every time you spend, and these points can be saved up and exchanged for discounts on future purchases, special offers, or even paying off utility bills. A similar idea is cash back, where you are given back a percentage of everything you spend (usually between 0.5% and 2%).
An important thing to look out for with this kind of card is the interest free period. Most cards will not charge you any interest on your spending so long as you repay within a certain number of days (usually around 50 or so). Beware of cards that charge interest from the day you spend - if you repay your balance in full every month, you really shouldn't be paying any interest at all.
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