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There are a lot of choices with credit cards, it can be difficult to know where to start and what to look for. The following guide should help you navigate some of the basic types and help you avoid a bad deal.
The best deal will depend on your circumstances, and what you plan to do with the card, but the place to start is online comparison engines. There are now many of these sites, so try two or three of them before making a decision. Some you might be familiar with are Money Supermarket, Compare the Market, uSwitch and Go Compare, there's even one by Google.
0% Credit
For a set period of time, there will be no interest on the balance you build up on this card. After the introductory period, a rate of interest will be applied to the outstanding balance monthly.
Balance Transfer
Again for an introductory period, this type of card is for when you already have a credit card, and you want to transfer the outstanding balance. There might be a fee involved or there might not, but you should expect a lower rate of interest than your previous card, at least in the short term.
0% Purchase
Similar to 0% credit, you will not pay interest on purchases during the introductory period, but this only applies to new purchases, not the outstanding balance.
Interest Free
The best of both worlds, you'll pay no interest on new purchases or your outstanding balance, until the introductory period runs out.
Low Interest
0% interest rarely lasts forever. If you're looking for something more long-term, a low interest card is your best bet. This saves you from the dance of changing credit cards every 6-12 months.
Cashback
Get paid to spend! The more you spend, the more cashback you will be rewarded with. Try to make sure you receive more cashback than you have to pay in interest. You will need a good credit rating to sign up for these cards.
Bad Credit
For people with poor credit ratings, county court judgements, or have claimed bankruptcy. There will be higher interest rates and less benefits to these cards, but if you've had credit problems in the past, this might be the best door open to you.
Rewards
If low interest rates are too boring for you, check out the reward cards. You could receive air miles, discounts from major retailers, or contributions to charity for spending with your credit card. Wherever possible, you should pay off the outstanding balance on your credit card to avoid interest fees. Interest on credit will almost always be higher than interest you are earning from savings, so don't hesitate to spend your savings and get out of debt, you'll be better off in the long run. You can keep your credit card, current account, and savings all balanced for optimum thriftiness by keeping an eye on all your incoming and outgoing transactions with personal finance software like Money Dashboard.
