Table: sorted by availability to new customers and APR, promoted deals first
Approval for any credit card depends on your status. The representative APRs shown represent the interest rate offered to most successful applicants. Depending on your personal circumstances, the APR you're offered may be higher, or you may not be offered credit at all. Fees and rates are subject to change without notice. It's always wise to check the terms of any deal before you borrow.
A credit card allows you to make purchases on credit that you can settle at a later date. At the end of every month, you’ll receive a statement that outlines your spending for the previous month. You can choose to pay off the entire outstanding balance or make the minimum monthly payment, which typically amounts to 2-3% of the balance owed. Alternatively, you can pay off an amount somewhere in between.
Unlike a loan, which comes with a predetermined repayment plan and a fixed end date, credit cards offer flexibility and are open-ended. You have access to credit when you need it, and you can settle your debt as quickly or slowly (within reason) as you choose.
High-street banks and building societies tend to be the first place people consider for a credit card, but they’re also available from supermarkets (including Tesco and Sainsbury’s), airlines (like British Airways and Virgin Atlantic) and dedicated credit card issuers (like Aqua or mbna).
Only repaying the minimum amount on your credit card each month means you’ll pay a lot more in interest and it could take years to clear your debt. Even if you can’t afford to pay off the balance in full, aim to pay off more than the minimum amount whenever possible. ”
There are plenty of situations when a credit card could be a smart choice. For starters, used carefully, they can be a cheap – or even free – way to borrow. But even if you don’t need to borrow money, there are other benefits you may want to consider.
Crucially, card issuers are jointly liable with the retailer if you don’t get what you paid for – so if your purchase (costing more than £100 and up to £30,000) isn’t as described, or if the retailer goes bust and takes your money with it, you may be able to get a refund through your card issuer.
If you are a young person or have a limited credit history, you may not have much of a credit record. If you plan to take out a mortgage or car finance in the future, it is crucial to demonstrate your ability to borrow money and repay it on time in order to secure favourable interest rates. One way to establish this is by using a credit card.
But even if you have excellent credit and you don’t need to borrow, a credit card could still work for you. Plenty of cards come with perks or rewards – from loyalty points or cashback through to airport lounge access or travel insurance.
We’ve outlined some of the best ways to make the most out of your credit card:
See Finder’s expert picks of the best credit card deals currently available on the market.
| Lowest representative APR | 4% |
|---|---|
| Longest 0% balance transfer offer | 28 months |
| Longest 0% purchase offer | 24 months |
| Longest 0% money transfer offer | 14 months |
| Highest cashback earn-rate | 2% |
| Lowest cash advance | 1.5% |
| Highest introductory bonus offer | 40,000 points |
With the efforts to contain inflation, lenders have raised the rate of borrowing. Our experts have some money-saving tips when you’re looking to apply for a credit card in the current financial market:
To find the right credit card to suit your wants and needs, it’s good to wise up on the types of credit cards on the market. Here are some of the main type of credit cards available in the UK, along with the key benefits they offer.
There are credit cards to suit almost anybody, but you’ll need to be 18 or older and a UK resident.
Credit cards are offered at the issuer’s discretion – in other words, when you apply for one, the card issuer will weigh up your application, and if it thinks you’re a safe bet, it’ll offer you a card. Card issuers normally state their minimum criteria (which could include a minimum income or being an existing customer) but meeting these criteria isn’t a guarantee of approval.
For really premium cards, you’re likely to need a decent income and a very good track record of borrowing responsibly (a high credit score), but credit builder credit cards and student credit cards are much easier to get approved for. If you’re not sure what your credit score is and what’s in your credit report, you can find out free with Finder.
If your credit card application is approved, your specific circumstances will determine what credit limit (that’s the maximum debt you can build up on the card) the issuer will offer you. Your personalised limit will depend on factors like your credit score, and your income and outgoings.
Once you’ve held a credit card for a few months or years, you might want to raise a request to increase your credit limit. Any increase will be at the card issuer’s discretion, but if you’ve been using your card sensibly (making repayments on time) and your circumstances haven’t changed for the worse, there’s a reasonable chance your request will be approved. Some card issuers will even pro-actively suggest a credit limit increase after a while.
One of the downsides of credit cards is that the fee structure can be a bit fiddly. But do your homework and use them correctly, and credit cards can be the cheapest form of borrowing going (or can even earn you benefits while not costing you a penny).
Almost all credit cards come with up to 55 or 56 interest-free days each billing period. To take advantage of this facility though, you’ll need to clear your balance in full each month. It’s only applicable on new purchases and, in most cases, not available on cash advances or balance transfers.
Here’s how it works: Let’s say you make a £100 purchase on the first day of the month, then at the end of the month you’re sent a bill and asked to pay by the 25th of the next month. Provided you clear your full balance, you could have enjoyed 55 or 56 days of interest-free credit on that purchase. However, if you only pay the minimum required payment, you’ll be charged interest on the purchase from the day you made it.
If you set up a direct debit to clear your full balance each month (yep, this is possible – and very normal) then you can relax in the knowledge that you should avoid interest altogether. Just make sure you have the necessary funds in your nominated account to cover the direct debit.
| Credit card | Charge card | Debit card | |
|---|---|---|---|
| Credit limit | Personalised credit limit set by card issuer. | Typically there is no defined credit limit for charge cards, but the provider may limit your spending based on your spending habits, repayment history, income and credit score. | If you’ve arranged an overdraft facility with your bank, that will come with a personalised limit. |
| Repayments | It’s better for your credit score to repay your balance in full every month, however you can opt to only pay the card’s set minimum repayment amount. | You have to repay your balance in full every month. | No repayments, unless you’ve entered your overdraft. |
| Consumer protetction | Protected by Section 75 of the Consumer Credit Act. | Not protected by Section 75 of the Consumer Credit Act. | Visa and Mastercard cards may be protected by the “Chargeback Scheme”. If you were wrongly charged or your purchase was cancelled you can dispute a payment to your provider. If the business you made a purchase from has either closed, or won’t help to get your money back, you may be able to make a chargeback claim. |
| Availability | Many providers. | Limited providers. | Many providers. |
| Credit score | Even with a bad credit score, you may be able to get a credit card. Using a credit card responsibly could help build your credit score. | Typically you need a good credit score to get a charge card. Using a charge card responsibly could help build your credit score. | It’s unlikely that you’ll be refused a bank account because of your credit rating. Paying bills in full and on time using your bank account could help your credit score. You might see a temporary dip in your credit score if you open multiple bank accounts. |
| Late fees | Yes | Yes | No |
| Annual fees | Depends on the provider and card. | Usually high fees though it depends on the provider and card. | Standard bank accounts are free. However, some accounts offer extra services or add-ons, such as insurance or overdrafts, which can cost extra. |
| Additional fees | Late payment, foreign exchange, balance transfers, annual fees, cash advances and cash withdrawal. | Late payment, foreign exchange, annual fees, cash advances and cash withdrawal. | Additional fees only apply if you use the following – overdraft, insurance, foreign exchange, and in some cases, cash withdrawals. |
| Eligibility | Over the age of 18, minimum income depends on the provider’s terms, UK resident. | Over the age of 18, minimum income depends on the provider’s terms, UK resident. | Typically, you have to be at least 16 to open a current account, however, there are some providers which have a lower minimum age. You don’t need an income to open most current accounts but you’ll need to be a UK resident. |
Once you’ve established what type of card you need, you can use Finder comparison tables to see the deals available.
The representative APR can be a helpful figure to use when comparing cards from different issuers – it’s a standardised figure that’s designed to illustrate the annual cost of using a card. However, the vast majority of card issuers tailor rates to the individual. They have to give their advertised “representative APR” to at least 51% of their customers, but the other 49% could be offered a higher rate. Typically, it’s the applicants that the issuer deems to be the safest bets that’ll be awarded the representative APR – based on factors like credit scores and affordability.
You can get a better idea of the rates that you’d be offered by using a soft-search facility e.g. an eligibility calculator. These involve a short form that banks or brokers use in order to be able to check your credit file without affecting your score. In return, you get a more accurate idea of whether or not you’ll get approved for a card plus the rate that you could be offered.
Moving to a better credit card deal can be a sensible way of managing your finances. But it’s important to know how to do it right.
There are many reasons why you might want to switch to a new credit card. Some of the main ones are outlined below:
Any application you make for credit can temporarily cause your credit score to drop. But it should pick up again, so long as you manage your new credit account well.
What’s more, if you’re switching to a credit card with a higher credit limit, your credit score could go up. This is because you’ll have a higher credit limit available to you, but if you’re only using the same amount of credit, your credit utilisation ratio will fall (which is good for your credit score).
Making the best out of your credit card is a fine art: it’s all about using it often, but not too much, and in the right way. Here are some of our top tips:
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