Credit cards are one of the most popular personal finance products in the UK. This is partly because they offer a quick and convenient payment solution to millions (both at home and abroad), but much of their appeal stems from the fact that they have moved beyond being purely a tool for payment. Credit cards now offer consumers a host of other perks and benefits, like 0% transfers, purchases at 0% interest and many different types of rewards (like cashback, airmiles and points). With all the choice available it's essential you compare credit cards thoroughly to get the best deal. Our credit card news, tips, tools and tables help you save time and get the right product for your needs.
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Most people understand that getting the right credit card can save them a lot of money, give greater flexibility than comparable financial products and offer incredible rewards, perks and benefits. However, with all the choice available, there’s also confusion so people should arm themselves with a basic understanding of what credit card products are available, before they compare specific attributes within a category.
Although every credit card is different, and even the same product offered to two different people could vary slightly, most UK credit cards tend to fall into one of three or four broad categories.
The first category, if it is a category, is Standard Credit Cards. These are offered by banks to current account holders and/or other consumers. Although some of these product have improved of late, they have traditionally been quite weak with regards promotional deals and rates; many people who hold these products do so for convenience.
Some of the most popular credit cards in the UK are 0% balance transfer offers, and it's easy to understand why. Balance transfers offer customers' an opportunity to transfer an existing balance with one credit card issuer to another at 0% interest for a fixed period. They aren't “free”, because the customer still pays the issuer, they are transferring the balance to, a "balance transfer fee" (normally around 3-4%, check the small print on specific products), but if used well they can be some of the cheapest money you will ever borrow.
Slight variations on traditional 0% balance transfer deals are also available. Low rate products offer customers access to a low rate for a prolong period (or sometimes the life of the balance) and are attractive to some people who prefer not to have to switch 0% deals regularly (or those who forget and incur interest).
Another twist on the traditional balance transfer products involves issuers reducing the length of the transfer, but also reducing the transfer fee. These low transfer fee products are particularly attractive to people who are confident they’ll pay their balance earlier than the leading 0% periods allow for and for whom the fee therefore represents the greatest expense.
0% Purchase credit cards offer customers the ability to spend on their cards without incurring interest on the accrued balance for a set time (assuming the minimum payments are made on time etc.) Because they offer 0% on shopping they appeal to people with various different circumstances, like...
Individuals purchasing ‘big ticket’ items, but without the funds quickly available
Individuals purchasing ‘big ticket’ items with funds available, but who want the additional consumer protections offer to credit card customers through section 75 of the Consumer Credit Act
Canny individuals who prefer to earn interest on their own money (with a high interest savings account) whilst spending at 0% on a credit card
Individuals in the fortunate position of paying off their credit card balance in full every month could investigate the reward schemes offered by credit cards. These schemes come in different shapes and sizes, each offering something unique.
Some credit card reward schemes are allied with major UK retailer point schemes which make the understanding of the actually value of the reward points easier.
Airmile cards are associated with a specific carrier or airline group and offer people the opportunity to earn points toward flights and other travel related perks.
Cashback cards offer rewards that are very simple and straightforward to understand. If getting a Cashback credit card sounds interesting to you it’s worth thinking about what you are likely to put on the card and how frequently, so you can calculate whether you would be better with a free cashback card or one which incurs an annual fee, but offers higher rates of interest.
Once you have a sense of the types of credit card available, the easiest way of comparing products, to select the right one for you, is through comparison tables. With this in mind we’ve developed a range of tables to help you quickly compare the finer detail of credit cards attributes. If you find a suitable product you can then use the secure links, found through clicking the 'more info' button, to take you to the right page on the issuers website (In fact some products we feature cannot be navigated to through the issuers websites, so it's essential you use the links).
Finally, when you get a great product, remember to tell you friends and family about where you found it!
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