The best credit card for you

If you're looking for a credit card, how do you pick the best one for you? Even with the different types on offer, it doesn't have to be confusing...

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Credit cards can do much more than simply spread the cost of a purchase, so it’s worth taking some time to find the best card for you.

For a start, using a credit card gives you extra protection under the Consumer Credit Directive. In fact, the card provider is jointly liable with the retailer for your purchase, so if something goes wrong with your purchase, you have two avenues to explore to get your money back.

But there are many other ways to get more from your plastic, as long as you have the right card. Here are just a few…

Cutting the cost of existing credit card debt

If you have existing credit card debt that you’re paying interest on, the right card could help you dramatically cut the cost.

Balance transfer credit cards offer up to 20 months interest-free on any debt that you move across. That will dramatically cut the cost of your debt, allowing you to clear the balance faster.

Just make sure you clear the balance before the interest-free period ends, otherwise you could end up paying a higher APR.

Earning cashback

That’s right, you could actually earn money while you spend, up to 5% cashback with some of the best cards, it’s like a shopoholic’s dream.

But these cards are only suitable if you can clear the debt in full each month. Otherwise, you’ll pay a small fortune in interest and it will quickly wipe out the returns you’ve made.

Earning rewards

Some shoppers will benefit more from a rewards card than from a cashback card as the returns can be more generous. You’ll usually earn loyalty points that can be transferred into discounts.

For example, a card affiliated with your regular supermarket might earn you more money off your regular shopping than you’d earn in cashback.

Building your credit score

Unfortunately, if you have a poor credit history then you’re unlikely to qualify for a market-leading card, so you won’t be able to get the benefits we’ve mentioned.

But you could use a card to build up a better score, as long as you handled it sensibly. Credit builder cards have high rates but the idea is that you repay the balance in full each month, to prove that you can handle debt responsibly.

Verdict

It’s worth remembering that credit card companies only offer these fantastic deals because they are confident that they can make money out of the customer in the long run.

So if you want to benefit from using a credit card, stick to the terms of the offer and be careful not to pay more than you need.

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