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 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 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
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
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 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 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