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What type of credit card is best for me?

Tim Heming
Written by  Tim Heming
Jonathan Leggett
Reviewed by  Jonathan Leggett
6 min read
Updated: 15 Nov 2024

Credit cards offer convenience, rewards, the opportunity to repair your credit file and even the chance to reduce debt. But it's essential to understand the ins and outs before applying.

Key takeaways

  • Choose a credit card that aligns with your lifestyle, spending and financial goals

  • Use an eligibility checker to find out which cards you're likely to be approved for – ours is free and won't impact your credit score.

  • Whether it's building your credit score, earning rewards, reducing debt interest or spreading the cost of purchases, a credit card is a useful tool for managing your finances

What type of credit card should I get?

The type of credit card you get should depend on what you want to use it for. Your spending habits, lifestyle, and financial situation play a role in what card fits your needs, and how likely you are to be approved for it in the first place.

The most popular use cases are:

If you're paying interest on a credit card balance, then shifting the debt to a balance transfer credit card is a great way of avoiding interest. Most people can save up to £356i - and transferring a balance is easier than you think.

Personal finance expert Kara Gammell considers these cards "a great tool for managing and, crucially, paying down debt without interest charges eroding your best efforts."

Be aware that most cards come with a fee (~3% of the transferred balance), so factor that into your calculations. Our credit card interest calculator makes it easy to work out if you could save money by transferring a balance.

Given the average credit limit for a balance transfer is £3000ii, if you have a lot of debt it might make more sense to consider a debt consolidation loan.

If you have a large purchase to make – perhaps a holiday, electricals, or furniture, it can be advantageous to pay for it with a 0% interest purchase credit card.

These cards offer interest-free spending for a set period – with the best deals on the market allowing you to space your payments for up to 22iii months.

Buying expensive items using any credit card also offers the added benefit of purchase protection under Section 75 of the Consumer Credit Act. Under this law, credit card providers are equally liable with retailers if anything goes wrong with your goods or services worth from £100 up to £30,000. It could mean you could claim back the money from your credit card provider if the company you bought from goes bust, for example.

For borrowing larger amounts, such as for weddings or home improvements, it's often better to take out a personal loan.

Credit builder credit cards are a useful tool for building trust with lenders, establishing a regular credit history, and boosting your credit rating if you have a low credit score or a limited credit history.

While nearly half of our enquiries from people aged under 25 are for credit builder cards, they're great for anyone wanting to improve their financial standing with lenders.

These cards are designed for consumers who wouldn’t normally qualify for standard credit cards and generally come with a higher interest rate (24.90%iv) and a lower credit limit (£500v) to reflect the higher risk to the lender. But if you use them carefully and repay everything you owe in full and on time each month, you will see your score increase.

Beyond credit cards, there are many other ways to improve your credit score, such as registering on the electoral roll or correcting errors on your credit report.

To check your credit report, you can use our free credit reporting service.

You might have existing card debts that you want to switch to a cheaper card or one with a 0% interest rate for transferred balances – but you also need the card for continued spending. In this case, you should look for a balance transfer and purchase credit card.

The best deals will offer 0% interest for a set period for any transferred card balances and new purchases, but the time frame for each might be different. For example, you could get 24 months interest-free borrowing for balance transfers but only 18 months on new spending.

When comparing deals, try to find the card with the longest 0% interest period for both. Read the small print to be sure you know the details of your card deal before you apply. There may also be a one-off fee, such as 2% or 3% for balance transfers.

A reward credit card or cashback card gives you useful benefits and incentives. For example:

  • A shopping or store credit card can offer vouchers or in-store points for your favourite shops when you spend on the card

  • An airline credit card can get you airmiles that you can put towards flights as well as access to airport lounges, hotels and car hire

  • A cashback credit card can give you cashback for certain spending

Rewards and cashback cards often charge a monthly or annual fee. They also tend to have a high standard APR or interest rate – this is the rate you’ll be charged if you don’t clear your balance in full each month. It means that to make the benefits and rewards really add up you’ll need to be sure they will outweigh any interest or charges you might pay on the card.

Most credit cards apply foreign usage charges which can add considerably to the cost of using your card abroad. But with a travel credit card these fees are lower – or in some cases there is no fee for overseas use, meaning they can be a cost-effective way to manage your holiday spending and protect purchases made under Section 75.

However, be wary of exceeding your credit limit or making late payments, as this will still result in a fee.

If you need a short-term cash loan a money transfer credit card could help plug the gap. They work in a similar way to balance transfer credit cards, but instead of transferring an existing credit card balance you can transfer money from the money transfer card directly into your bank account. This money can then be used to pay an emergency bill, pay off an overdraft, or other high-interest debt.

Money transfer cards tend to come with a low or even 0% interest rate for a set period – so it could essentially be a short-term interest free loan.

Remember you’ll still need to repay the minimum monthly repayment required on the card, and after the low or 0% interest period ends the interest rate will usually increase to a much higher rate. So aim to pay off the debt before the offer period ends.

How do I know what credit card I can get approved for?

The quickest way to find out is to use our eligibility checker. It's a soft search, meaning it won't show up on your credit report.

In September, 80% of customers who used our eligibility checker were pre-approved for a balance transfer credit card, subject to final lender checks.

The eligibility checker will take your information and then score each card 0-100 (100 being the highest chance of approval), including which cards you're pre-approved for.

Kate Hughes
Kate Hughes
Money & Savings Expert

Our expert says...

"Linking your card to your phone for contactless payments isn’t a problem if you plan to use the credit card for your everyday spending, but could be if you’ve taken out the card for a specific purpose, such as a balance transfer and don’t want to build up more debt.

"Be disciplined. Pick the right credit card for your specific needs, stick to using it for those needs, and make your repayments on time, and a credit card can be an empowering tool in your financial arsenal.

"But take your eye off the ball, and you could find yourself paying over the odds for the privilege of the plastic in your wallet."

How many credit cards should you have?

There isn't a 'best' number of credit cards you should own, but you can own multiple cards if needed.

Each card has its own features, so it's perfectly normal to have a balance transfer card and an interest free credit card open in your name.

If you're using multiple cards, keep an eye on your credit utilisation rate. Lenders prefer if you're not overextending yourself, and remaining at a high credit utilisation rate indicates to lenders that you're struggling to manage your finances without borrowing.

What is the most widely accepted credit card in the UK?

Visa and Mastercard are the most widely accepted issuers in the UK, and can be used almost anywhere that accepts card payments in store or online.

Is Mastercard or Visa better?

There isn't much difference between Visa and Mastercard, offering the same basic features and acceptance domestically and internationally.

What about American Express?

While American Express is also commonly accepted, you might find merchants don't accept it outside urban centres. For online purchases, many businesses will accept Amex.

Other useful guides for choosing a credit card

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  1. Annual saving based on 51% of customers transferring £2,049 from a 24.9% (variable) p.a. card, with a 5% monthly repayment (November 24). BoE and UK Finance.

    Representative example: transferring £2,049, 3.49% balance transfer fee, 0% over 29 months then 24.9% (variable) p.a. Representative 24.9% APR. Credit broker not lender. 18+ UK only. Subject to status. Moneysupermarket data correct as of 1th November 24.

  2. Based on the median guaranteed credit limit of users searching for credit cards to transfer an existing balance through MoneySuperMarket in November 2024, by the highest eligibility rating returned.

  3. Accurate as of 06 December 2024.

  4. Based on the median Representative APR of users searching for credit cards to improve their credit rating through MoneySuperMarket on 05 December 2024, by the highest eligibility rating returned.

  5. Based on the median guaranteed credit limit of users searching for credit cards to improve their credit rating through MoneySuperMarket in November 2024, by the highest eligibility rating returned.