There are several types of credit card, so the best for you will depend on what you’re trying to do (and your credit score). As lockdown eases, you may be thinking about major purchases or travel – there are cards designed for each. We’ve listed the main categories with step-by-step advice on how to choose the best credit cards of each type, plus our “top pick” recommendation (find out how we choose our top picks). Learn what customers think about their card issuer in our league table of customer ratings.
Rewards credit cards offer points or cash based on the amount you spend, and may also offer an introductory “welcome” bonus. Your points “earn-rate” may vary according to where you use the card – a Tesco reward card will earn you points at a higher rate when you use it in Tesco, for example. You can typically redeem your points for shopping, travel, gift vouchers, etc. Premium rewards cards may bundle in other perks, like airport lounge access for example, but this could be offset by an annual fee, in which case you should weigh up whether the benefits would outweigh the running costs.
Balance transfer credit cards let you move existing credit card debt to a new card, where you’ll enjoy 0% interest on the balance for a set period. At the end of this introductory 0% period, the card’s standard rate kicks in – which is typically much higher. Provided you don’t use them for additional spending, these cards allow you to clear debt faster, because all of your monthly repayment goes towards the outstanding balance. The catch? There’s generally a “balance transfer fee” to pay – which is a percentage of the balance you’re transferring.
0% purchase credit cards let you make purchases up to your credit limit and then pay 0% interest on them for a promotional, introductory period. At the end of this period, any outstanding balance will start to accrue interest at the card’s standard purchase rate, which will be much higher.
Cashback credit cards reward you for spending in the form of pounds or credit on your account. How much you can earn will depend on the card’s “earn-rate”, plus any “earnings caps”. Cards that are affiliated with a brand may offer a better earn-rate when you spend with that brand, and in some cases cards come with an introductory enhanced earn-rate for a specified period or an enhanced earn-rate once your spending has exceeded a specified threshold.
These credit cards are designed to make it more affordable to spend money overseas or online with international retailers. Unlike most debit and credit cards, they don’t charge a foreign transaction fee when you use your card to spend in an international currency. Currencies will usually be converted using the standard Mastercard rate or Visa rate. Just remember that “fee-free” does not mean “interest-free”.
When you’re using one of these cards, don’t forget that if a merchant/bank abroad offers to take payment in sterling (this is called dynamic currency conversion), you should decline and choose to pay in the local currency. Otherwise the it will be the local bank or merchant whose currency conversion fee structure will apply, rather than your card issuer’s.
Credit builders are simple credit cards designed to improve credit scores, for people with bad or no credit history. Expect low starting credit limits which can be quickly reviewed provided the card is used responsibly. This type of card will often be a “stepping stone” product to credit products with a better interest rate.
Frequent flyer credit cards let you earn frequent flyer points or air miles on everyday purchases, either directly or by transferring card reward points to your chosen airline loyalty programme. These cards tend to be more premium options, so there’s often an annual fee to consider, but chances are it’ll be offset by some tasty perks.
A 0% money transfer card allows you to make transfers from the credit card to your bank account, and won’t charge interest on this balance for a specified period. After the 0% period, the card’s standard rate kicks in, which is invariably much higher.
Most student cards are tied to a student bank account – in other words you’ll usually need to hold a student account with a particular bank in order to be eligible to apply for its student credit card. Student credit cards come with no annual/monthly fees, but low credit limits and uncompetitive rates (in part due to the limited credit histories of many of the cards’ users). As such, it’s not advisable to carry a balance from month to month. However, provided you don’t, you’ll usually be able to take advantage of up to 55 or 56 days of 0% interest on your purchases each month – a handy buffer when you’re waiting for your next student loan payment.
These cards are designed to serve multiple needs. You’ll get the best of both worlds when it comes to 0% interest deals – with interest-free periods on both purchases and balance transfers, and potentially other useful features like the chance to earn rewards or even fee-free overseas spending.
We asked cardholders to rate their satisfaction with service, and whether they’d recommend their card issuer to a friend. We’ve shown both for each brand in the table below. Our independent survey of 1,861 card customers was carried out in December 2020. The table is ordered by percentage of customers who said they’d recommend the brand to a friend.
|Card issuer||Overall satisfaction||Customers who’d recommend||Overview|
|★★★★★||95%||American Express has been top dog for customer service two years running. It offers a range of credit cards with tempting rewards such as lounge access, and the exclusive Experiences rewards programme.||View deals|
|★★★★★||88%||An arm of the oldest bank in UK, Barclaycard has some of the longest balance transfer periods on the market and also offers rewards and everyday cards. However it’s range of cards is dramatically smaller now than it has been in recent years.||View deals|
|★★★★★||84%||Like other credit card retailers, M&S Bank lets you earn M&S on every credit card transaction, and preferential foreign exchange rates.||View deals|
|★★★★★||83%||Lloyds Bank has a wide variety of credit card products, with rewards, cashback and even specialised cards for large purchases.||View deals|
|★★★★★||83%||NatWest offers specialised rewards and balance transfer cards, as well as a student credit card.||View deals|
|★★★★★||82%||Halifax lets you combine 0% balance transfers and purchases on one card, and also issues the super-popular Clarity card with 0% currency conversion fees.||View deals|
|★★★★★||80%||Tesco Bank has a wide range of credit card products and lets you earn Tesco Clubcard points on every transaction you make using your card.||View deals|
|★★★★★||80%||Virgin Money provides a number of bonus credit card programs, such as Virgin Red, and offers discounts across the entire Virgin Group. With a Virgin Atlantic credit card, you can also collect air miles to spend on flights and upgrades.||View deals|
|★★★★★||80%||Spanish banking giant Santander offers generous cashback benefits and credit cards aimed at those looking to travel abroad.||View deals|
|★★★★★||78%||The UK’s second-biggest supermarket brand, Sainsbury’s lets you earn Nectar points on all credit card transactions, with bonus points for new customers.||View deals|
|★★★★★||78%||One of the world’s largest banks, HSBC has an extensive credit card product range, with 24/7 customer service and global reward systems.||View deals|
|★★★★★||78%||Aqua credit cards are specifically designed for those looking to build their credit score. Unlike other credit-builder cards, Aqua also lets customers earn rewards for using their card.||View deals|
|★★★★★||77%||Capital One offers credit-builder cards for people with limited or damaged credit files, aiming to say “Yes” when other card issuers wouldn’t. The interest rates for Capital One cards are high, so not paying off balances in full each month can get expensive.||View deals|
|★★★★★||71%||MBNA is part of the Lloyds Group and offers a range of credit cards with extended 0% balance transfer and purchase periods.||View deals|
If you carry a balance on your credit card from month to month (rather than clearing your balance in full), then you’ll usually pay more in interest than you’ll earn in rewards. If you always clear your balance in full each month, however, then with most cards on the UK market, you won’t pay interest at all, thanks to a grace period on purchases. That means that, provided you choose the right card and use it carefully, you can earn reward points without paying interest.
Some rewards or frequent flyer cards come with annual or monthly account management charges, but thankfully, plenty don’t charge this fee. If you think you would spend a lot on a credit card but would also clear your balance in full each month, then paying an annual fee might actually be worth it. That’s because these are the cards which tend to come with the best reward point earn-rates.
Possibly, yes. Although realistically some top cards will be off the table, there are plenty of card issuers that specialise in credit builder cards – which are specifically designed for those with a damaged or limited credit history.
Additionally, the interest rates and credit limits of credit cards are often tailored to the applicant, which means you may find that you are offered a card, but with a relatively low opening credit limit, and potentially with a rate that’s higher than the advertised representative APR.
If you can make your peace with an annual fee, the British Airways Premium Plus Card offers the highest Avios earn-rate, while Amex’s Preferred Rewards Gold Card comes with two complimentary airport lounge visits annually.
In December 2020, we ran a customer satisfaction survey on credit cards. 1,861 people responded and gave us their opinion on their current credit card provider.
The survey asked respondents how satisfied they are with their credit card (using a 1-5 rating) and whether they would recommend the brand to a friend. We converted the responses into star ratings and produced a shortlist of the top-performing companies based on customer satisfaction. When there was a draw, we used the recommendation score (that is, the percentage of customers who said they would recommend the brand to a friend) as a tie-breaker.
You can get a full breakdown of our ratings methodology for credit cards here.
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