What’s the right credit card for you?

There are hundreds of different credit cards to choose from – but make sure you pick the right one for your needs.

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The credit cards section of moneysupermarket.com is jam packed with best-buy deals. But not all the market-leading cards on offer will be suitable for you.

People who pay off their credit card bills in full each month, for example, need a different card to those who have outstanding debts, while someone planning a wedding or a kitchen refit will benefit most from another deal altogether.

That’s why we have come up with some top tips for how to find the best possible credit card, whatever your circumstances.

I have outstanding debts. What is the best credit card for me?

If you already have debts built up, whether on a credit card or in the form of a current account overdraft, then a balance transfer card offering an introductory rate of 0% is your best option.

The Barclaycard Platinum Card, for example, is currently giving new customers looking to transfer debts from elsewhere 20 months at 0%, subject to an up-front balance transfer fee of 3.2% of the total debt to be moved on to the card. People who apply for this card through moneysupermarket.com will benefit from a £10 reduction to the balance transfer fee.

Other advantages of the card include a 0% introductory deal on purchases for the first three months and a reward scheme. However, if you are using the card as a way to pay down your debts while avoiding interest charges, then further spending should not be part of your plan.

The representative annual percentage rate (APR) charged on the card once the balance transfer period comes to an end is a hefty 17.5% variable, so it is in your interests to concentrate on reducing the balance rather than adding to it.

The same is true of other balance transfer cards such as NatWest Platinum, which offers 0% on debts transferred across for the first 18 months, subject to a 2.8% fee.

It too offers 0% on purchases for the first six months, and rewards on shopping, travel and wine, but charges anyone who fails to clear their balance within 18 months a representative APR of 16.6% variable.

I need to make some large purchases and want to spread the cost. Which credit card should I choose?

Whether you are getting married, have recently moved house or need to fund some vital home improvements, most of us will at some stage need to spend more than we have available in our current and savings accounts.

The good news for those looking to spread the cost of their spending is that there are lots of deals on the market offering 0% on purchases for up to 15 months.

The Marks & Spencer credit card, for example, gives you 15 months at 0% on purchases, after which the representative APR jumps to 15.9% variable.

Meanwhile, Tesco’s Clubcard Credit card also offers new customers 15 months at 0% on purchases, nine months at 0% on balance transfers, subject to a 2.9% handling fee, and has a standard representative APR of 16.9% variable.

Both these cards also offer generous reward schemes to ensure you get more for the money you spend, more details of which are given below.

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I pay my balance off in full every month. Which credit card is best for me?

If you always clear your balance in full, there is little point choosing a credit card based on the rate of interest charged.

Instead, you should take out a card that rewards you for spending by giving you cashback on the cost of your purchases, or offering discounts on other goods and services.

The best cashback card on the market at the moment is the MBNA American Express Card with Cashback, which gives you up to 1.5% cashback on all purchases.

Other cards worth a look include the MBNA Visa Card with Cashback and the American Express Platinum Cashback Card, which gives new customers up to 5% cashback in the first three months.

Meanwhile, market-leading reward cards include the Tesco Clubcard Credit Card (see above), which gives you one point for every £4 spent, plus Clubcard points when shopping in Tesco stores.

The Marks & Spencer Credit Card mentioned above is also attractive. It gives you one point for every £1 spent in store and one point for every £2 spent elsewhere.

I have a poor credit rating. What credit cards can I have?

Most of the cards mentioned in this article are best-buy deals reserved for people with unblemished credit files.

If you are unsure whether you would qualify for them, you can avoid your credit rating being further damaged by rejected applications by using the moneysupermarket.com Smart Search tool to check which cards are likely to accept you first.

Even if your score is not good enough to access cheap deals now, however, credit cards also offer a way to improve your chances of being accepted for market-leading deals in the future through so-called credit builder deals.

These include the Capital One Visa Card, which has a representative APR of 28.9% variable, and Barclaycard Initial, with a representative APR of 29.9% variable.

However, you must be careful to pay the balance off in full every month as not only will this help to improve your score more quickly, but high interest rates on these cards would also cause any debts to quickly spiral out of control.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

We’re free, independent and compare all UK credit cards, as well as offering exclusive deals you can’t get anywhere else.

Contact moneysupermarket.com at Moneysupermarket House, St David’s Park, Ewloe, Flintshire, CH5 3UZ. © Moneysupermarket.com Ltd 2011

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