Credit Card Comparison

Compare UK balance transfer, cashback, rewards card and more.

Finder UK’s free service makes comparing credit cards simple. To help you find the best credit card for you, we’ve organised our comparison by card type, card features, and card provider. Whether you’re after a card with a low interest rate, a balance transfer option or a rewards card, we make comparing easy.

How credit cards work

A credit card allows you to borrow money from a credit provider without having to give any upfront security. Banks and building societies are the first place most people will go to for a credit card, but there are many supermarkets, airlines and stand-alone credit card companies that issue credit cards.

You need to be 18 or older to apply for a credit card and the issuing party will request basic information from you to submit with the application. Just like with any other loan application, there’s no guarantee that the application will be approved.

The information that you provide and your credit score will determine your credit limit, which is the maximum amount you can borrow. Your credit card balance can never be more than this amount at any one point.

When you make a purchase with a credit card, the card issuer will make the initial payment to the retailer. The card issuer will then send you a statement once a month that includes a breakdown of the payments during the billing cycle and the total amount you owe.

There is a minimum required amount you have to pay back every billing cycle, which is a percentage of the outstanding balance. But to keep fees and interest low, it’s best to pay off the balance in full every period.

A wide range of credit cards exists on the market, including cashback cards, balance transfer cards and reward cards. The right card for you will often depend on your lifestyle and your financial goals.

Types of card to consider

Just some of the cards available in the U.K

0% Balance transfers

Balance transfer credit cards allow you to move existing debt from one credit card to a new one that charges less interest. This rate can even be 0% for a number of months (up to 40 months) after which it will go up to a higher rate. A one-time transfer fee will apply, typically between 2% and 3%.

  • Save on interest by moving to a lower percentage credit card
  • Essentially an interest-free loan if the balance is cleared within the 0% period
  • Manage credit card debt more effectively by consolidating balances

Cashback

Cashback credit cards are one of the most popular types of credit cards due to their simplistic rewards feature. The more you spend on a cashback credit card, the more cash you earn. The reward is calculated as a percentage of a particular purchase and can vary between 1% and 5%, depending on the issuer, as well as the type of purchase you are making.

  • Get rewarded for purchases in cash
  • Easy-to-understand reward feature
  • Cash gets paid into your account automatically

0% Purchase

0% purchase credit cards don’t charge any interest on purchases for a set amount of time, usually between 12 and 32 months. Even though there’s no interest charged on the outstanding balance, you still need to make minimum repayments each month or risk being penalised with high fees. This type of card is ideal for a one-off large purchase, like an annual travel card or season ticket.

  • Allows you to pay for expensive items in instalments without interest charges
  • Cheaper than traditional loans in the short-term

Credit Builder

Having a low credit score will impact your ability to obtain loans and the type of deals you are likely to get offered. A credit builder credit card is ideal for people with a damaged or limited credit score. You build your credit score by simply making the minimum monthly repayments. These cards will charge a higher interest rate so if possible, pay off the balance in full every month.

  • Easy way to build up your credit score over time
  • Good option to start with for first-time credit card users

Rewards

A rewards credit card compensates you for every purchase you make, either in straight cash or points which can be converted into discounts. Discounts can be used in participating shops, travel agencies and airlines, to name but a few. There’s usually a minimal annual spend before the reward kicks in, so this type of credit card is best suited for people who use it for large as well as everyday purchases.

  • Rewards loyalty which is handy if you have a favourite shop or retail establishment
  • Can build up points to get discounts on one-off expensive purchases like holidays and plane tickets

Overseas Spending

Overseas spending credit cards are specifically designed for travelling and making purchases abroad. Your regular credit card will charge additional fees for overseas transactions and cash withdrawals. But with an overseas spending card, these fees are often waived, or very low, and you are likely to enjoy unbeatable exchange rates on local currencies.

  • No extra fees for making purchases abroad
  • Much safer than carrying around cash
  • Favourable exchange rates
  • Will often include relevant bonuses like travel insurance and airline discounts

Air Miles

Air miles credit cards will reward you with either points or miles for every purchase you make. Once you’ve accrued enough, you can get discounts on air travel. Many airlines will offer their own rewards credit card but this benefit may also be available from certain high-street banks and building societies. This type of credit card is a good option for people who have a big credit card budget, as it can take a lot of spending to build up the rewards.

  • Discount on plane tickets
  • Companion tickets give you one free ticket at no extra cost
  • Access to exclusive airport lounges

What are the costs of a credit card?

  • Repayments. You’re free to repay as much as you like as often as you like. You’re required to make the minimum repayment when your statement is issued. The minimum repayment is usually 2% of your outstanding balance. You will pay a late payment fee if you don’t make the minimum repayment by the statement due date.
  • Annual fee. This is the cost to own a credit card. The annual fee ranges from £0 to hundreds of pounds depending on the credit card type. The credit card annual fee is deducted from your available credit and accrues interest at the purchase rate if it isn’t paid in the first statement period.
  • Interest rates. Interest is the price you pay to borrow money. Credit card interest rates are much higher than other types of finance because credit cards are an unsecured product; financial institutions have no recourse to take your assets if you default on your repayments.
  • Other fees. Other fees you may run into include late payment fees, overlimit fees (a fee for spending past your credit limit), rewards programme membership fees and cash advance fees.

What to consider when comparing cards

To help you find the right credit card for you, there are a few factors to consider when comparing the various options.

  • Your income: This is one of the biggest factors as credit card providers want to know you are able to pay back your debt. Generally speaking, the higher your income (not necessarily from employment), the more likely you are to get approved.
  • Your credit score: Your credit score will play a big role in the type of credit card available to you. The higher your credit score, the better the terms and rates that you will get. An Experian score of 560 is often considered the minimum to get approved for a standard credit card.
  • Your age: You need to be 18 or over to apply for a credit card. If you are young, you’re likely to have a limited credit history. You could consider a credit builder credit card that will improve your credit score over time and qualify you for better deals.
  • Your personal interests: Some credit cards offer rewards that may compliment your lifestyle and interests. If you travel abroad, an air miles or travel credit card might be a good choice. If you frequently shop at a specific chain, you could take advantage of a credit card that offers vouchers and discounts.
  • Your financial situation: It’s not ideal to get a credit card just to fill the gap between income and expenses. Credit card debt can spiral out of control if the outstanding balance is not paid back regularly. A credit card should instead be used to help you achieve your financial goals. For example, if you need to make a big purchase that you want to pay off over time, a 0% purchase credit card could help you do this without having to pay extra in interest.

Important credit card features

To get the most out of comparing credit cards and ultimately choose the right one for you, it is important to understand the different features that are included within credit card deals.

Your credit limit is the maximum balance amount you are allowed on your credit card at any one point. This limit will be calculated by the card issuer and is dependent on various factors, mainly your credit score and your annual income. Some premium options do offer no-limit credit cards.

What happens when you go over your limit will vary from issuer to issuer but at a minimum, you will be charged an additional fee and your credit score will be affected. Other penalties might include increased interest rates, reduced credit limit and freezing your credit card until your balance is back within the maximum amount allowed.

On most credit cards there will be a set monthly or annual fee, also called an ‘admin fee’. Some providers might waive this fee for 12 to 24 months as part of the signup deal.

A balance transfer fee is levied when you transfer your balance from one credit card to a new one and is a percentage of the transfer amount. This rate is usually between 2 and 3% but can be as low as 0% on low- or no-fee balance transfer credit cards.

Additional fees are also levied when you withdraw cash from an ATM, exceed your credit limit and use your credit card abroad (except specific overseas spending credit cards).

The interest charge on a credit card will be shown as ‘APR’. APR stands for Annual Percentage Rate and this is what you’ll pay to the card issuer on top of the money you borrow. The APR includes the credit interest rate as well as any fees and is averaged out over 12 months.

It is important to remember that you are not guaranteed to receive the representative APR. A minimum of 51% of successful applicants will receive this rate but you may get a higher rate.

Credit Cards often carry an interest-free, grace period during which no interest will be charged on an outstanding balance. It can also be seen as the period from when the billing cycle closes to when the outstanding amount is due on that bill. The period varies greatly between card issuers and can be anything from 21 days to 60 days.

You will benefit from grace periods if you pay your balance off in full every month as it is only applicable on new purchases and, in most cases, not available on cash advances or balance transfers.

Credit cards are secured by a chip and pin system for physical payments and by a 3 digit security code for online payments. If a fraudulent transaction does occur, your bank or credit provider has to refund you unless they have an adequate reason for refusing such a refund.

You can also get protection for any purchases you make up to £30,000 through the Consumer Credit Act. It doesn’t cost anything extra and provides protection against merchants failing to provide goods and services after purchase or where the product doesn’t have the same features as advertised (misrepresentation).

Reward cards are a good way of getting compensated for making purchases with your credit card. The type of rewards will vary but may include cashbacks, air miles and loyalty points.

These rewards will either pay you back a percentage of your purchase at particular retailers or reward you in points for discounts and vouchers.

Related Posts