Close up of black credit card

Choosing a credit card

By  , last updated

What’s the best way to work out which credit card is best for you?

First, you need to decide which kind of card you want – balance transfer, purchase, reward, low rate or another type of card. Not sure which kind of card to go for? Just answer a few short questions to see which type of card would be right for you:

Do you have a good credit history?

For more information on credit scoring and credit history, read our guide to What is a good credit score?

Do you want to transfer a balance from an existing debt?

Consider a Credit Builder Credit Card

If you've had problems with debt in the past, it's likely that your credit score will have been damaged.

But other things can affect your credit score, such as having little or no history of borrowing.

Whatever your reason for a having a bad credit score, it doesn't need to be permanent. One way to repair your score is by getting a credit builder credit card.

Some of these cards offer 0% introductory offers for purchases and balance transfers.

Get a card

Will you also use the card for spending?

Do you want to make a major purchase?

Consider a Balance Transfer and Purchase Credit Card

If you want to transfer a balance to a new card and use that card for fresh spending, a combined balance transfer and purchase card might be your best bet.

Get a card

Consider a Balance Transfer Credit Card

If you want to transfer an existing debt onto a 0% balance transfer credit card, there are a number of factors to consider.

While the longest 0% interest free period may seem tempting, you should also take into account any balance transfer fee that applies.

If you're transferring a smaller balance, you might be better off taking a shorter 0% interest free period, but with no (or a lower) balance transfer fee.

Our BT calculator tool helps you to understand what is best for you, based on your requirements.

Get a card

Consider a Purchase Credit Card

There are two main types of purchase credit card.

If you are going to make a large one-off purchase, you should look for a long 0% purchase card, where interest isn't charged for a given number of months.

You should also consider a 0% card if you are planning to use it for regular spending, but won't be paying the balance off monthly.

If you'll be paying off your balance each month, consider a card that offers cashback or points, so you can earn while you spend.

Get a card

Consider a Cashback & Reward Credit Card

These cards pay cashback or give you other 'rewards', such as redeemable points, when you use the card to make certain purchases, or use it in certain shops.

Get a card

Then you can use our Smart Search tool to find out which cards you’re eligible for.

Finally, you need to choose between the ones that appear on your results table.

How the tables work

When you see your results, each card in the list will have a score out of 10 to show your chances of actually getting that card. 

But, as well as your eligibility score, there are lots of other factors to consider before choosing your credit card. Many of these will depend on the type of card you want, but some apply to all cards.

For example, you’ll need to look at the cost of any potential new card (interest rate plus any fees) versus the cost of your existing credit card. 

You can do this by comparing the representative annual percentage rate (APR) on your current card with the APRs shown against the cards on your results table. 

For instance, if you’re moving an outstanding balance over to a balance transfer card, we’ll show you how much each card will cost you in fees and interest, and how long it will take you to repay what you owe based on your balance and the amount you repay each month.

What else you need to consider

You should always look carefully at any special deals. There will be different considerations for different card types, and you’ll need to bear these in mind when you’re choosing a card. 

Here’s what to look out for:

Balance transfer cards

A balance transfer card is designed to reduce the amount of interest you’re paying on your existing credit card debts. 

With this in mind, you’ll need to consider whether you want the longest number of months with a 0% rate of interest (which usually means a higher balance transfer fee to pay at the outset), or if you’d rather go for a shorter 0% interest rate period (with a lower fee). 

If you opt for the latter, you must be sure you can pay off what you owe within the shorter 0% introductory period, so you don’t get hit with steep interest charges on what you still owe when the 0% rate ends.

Reward and cashback cards

If you want a reward card, take a close look at the actual value of the rewards on offer. Many offer points which can be redeemed as discounts on your supermarket shopping, or flights with certain airlines. 

Think about how much you tend to spend on your credit card each month and consider how much the rewards you’ll get will be worth to you. If you don’t want rewards linked to one particular shop or airline, you may be better off opting for a cashback card, as you’ll be able to spend the cash on anything you want. 

You should also check whether there’s an annual fee, and how much it is. 

Remember, this type of card is only worthwhile if you will definitely clear your balance in full each month. If you can’t do this, the interest charged will soon outweigh the benefits of any rewards on offer.

Cards for overseas use

If you are trying to find the best credit card to use abroad, look at both the cash withdrawal fees and the charges for using the card to pay for something while you are away. 

You’ll also need to compare the APRs so you can find the cheapest rate if you know you aren’t going to pay off your balance in full each month.

Purchase cards

If you want a purchase card because you’re keen to avoid paying interest on your spending, you’ll probably be looking for a long interest-free period. 

Make sure you know how much interest you’ll be charged when the 0% rate ends. If you think you aren’t going to be able to pay off what you owe within this period, you should opt for a card with a low APR. 

Alternatively, you could plan to move your balance onto a 0% balance transfer card when your interest-free period on the purchase card comes to an end.

Combined balance and purchase cards

When choosing a balance and purchase card, you should look at the introductory rates for each. 

Some cards offer a 0% rate on both balance transfers and purchases for the same number of months, while others might offer a longer 0% rate on purchases than balance transfers, or vice versa. 

Think about which is most important for you. If, for example, you know you’ll be able to pay off any new spending quickly but it will take you longer to clear your balance, then the best card for you is likely to be one offering a longer introductory rate on balance transfers and a shorter rate on purchases.

Low rate cards

Low rate cards aim to offer a consistently competitive APR, and can be less hassle than constantly changing cards when 0% introductory periods finish. When you’re choosing a low rate card, you should go for the card with the lowest APR you can get. 

If you’ve already got a credit card you want to move a balance across from, see how the interest charged compares with the rate you are currently paying, so you can be sure you’ll make a saving by moving your balance over. 

Credit builder cards

The APR is usually the most important thing to consider when choosing a credit builder card, as they tend to be much higher than the APRs charged by other types of credit card. 

Try to pay off your balance in full each month, as this will help you improve your credit score. 

Where to next?

What is a good credit score?

Compare credit cards with Smart Search

Credit card decision tree: how to pick the right card


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