How to find the right credit card for you

The right credit card could save you hundreds of pounds a year. But with so many different cards to choose from, how do you know which is the best for you? The key thing is to think about how you use your credit card as this will determine what type of card you need. For example, there’s no point in going for 0% deal if you pay your credit card bill in full each month. Here, we highlight five different types of credit card user and look at the best cards for each.

By Clare Francis, MoneySupermarket

I have existing credit card debts. Which cards offer the best deal?

If you own money on credit or store cards you are probably paying more interest than you need to. Look for a 0% balance transfer card. This type of deal enables you to move your existing debt onto your new card and benefit from a lower rate of interest.

The average credit card rate is 17.31%. Someone with a £2,000 card debt could save £465.05 over the course of a year by transferring it onto a 0% deal.

The Barclaycard Platinum with Extended Balance Transfer has the longest 0% period at 22 months. You will have to pay a transfer fee of 2.9% but this is added to your debt - you don’t have to pay it upfront. It’s important to pay off your balance during the interest free period because once it ends you’ll be charged the standard representative rate of interest, which is 17.9% (variable).

If you don’t need that long to clear your credit card debt, it is possible to save on the balance transfer fee. Virgin’s Low Fee Balance Transfer credit card has a nine-month 0% period and the fee is just 1.5%. The representative annual percentage rate (APR) on this card is 16.9%.

Compare these and other balance transfer cards.

Every week, Clare Francis, financial journalist and editor of comparison site moneysupermarket.com will offer tips and advice on all things money-related to help iVillagers make the most of their hard-earned cash. From energy bills to car insurance; credit cards to children’s savings accounts; mortgages to discount vouchers Clare will show you how to make sure you’re getting the best deal.
I need to make a large purchase but want to spread the cost. Which cards offer the best deal?

If you are planning a big purchase or perhaps have an expensive time coming up – maybe you’re moving house or planning a wedding – you may not be able to afford to pay your credit card off in full. In this instance a card offering a 0% period on purchases is what you need.

The M&S Credit Card and Tesco Clubcard Credit Card both offer 15-month 0% periods on purchases, giving you lots of time to pay off your balance before you start accruing interest. Once the 0% offers end you’ll be charged the standard rate. M&S’ representative APR is 15.9% (variable), while Tesco charges a slightly higher 16.9% (variable).

The other advantage of these two cards is that you earn loyalty points when you spend on the card: M&S reward points or Clubcard points.

Click here for more details on these and other purchase cards.
I clear my balance every month. Which cards offer the best deal?

If you pay off your credit card in full each month you won’t be charged interest. Therefore a 0% deal won’t benefit you. However, you can get more from your credit card by opting for a cashback or reward card.

Santander’s 123 Cashback Card, for example, gives you 3% back on fuel purchases (up to a maximum of £300 a month), 2% back on department store spending and 1% back on supermarket shopping. You will, however, pay a representative APR of 18.9% (variable) on any borrowing, plus an annual fee of £24. The fee should soon be offset by the generous cashback scheme.

Another great option is the American Express Platinum Cashback card. Depending on where you spend your money, this could be a better deal than the Santander card. There is a £25 annual fee but you earn cashback regardless of where you use your card – it isn’t restricted like the Santander deal. The Amex card pays 5% cashback for the first three months (up to a maximum spend of £2,000). You then earn the standard rate of 1.25%. On the anniversary of you taking the card out, you’ll earn a higher rate of 2.5% for one month. The representative APR on this card is 18.5% (variable).

Find out more about these and other cashback cards.
I travel abroad a lot. Which cards offer the best deal?

Most credit cards levy fees if you use them abroad. However, there are some that don’t so if you’re a frequent traveler it is well worth taking advantage of one of these deals.

The Nationwide Building Society Select Card has a competitive representative APR of 12.9% (variable) and offers 0% on purchases for the first 18 months. However, it is only available to Nationwide customer Flexaccount customers.

If you don’t have a Nationwide current account, the Post office Platinum Card is also free to use overseas. It has a representative APR of 16.9% (variable) and offers three months at 0% on purchases.

Compare the best cards for overseas’ usage.
I have a poor credit score. Which cards offer the best deal?

If you have never had a credit card before or have missed payments in the past you won’t qualify for any of the deals previously mentioned as they are only available to those with excellent credit scores. However this doesn’t mean you can’t have a credit card.

Some deals are aimed specifically at those with poor credit histories. They charge higher-than-average rates of interest though so it is important to pay your balance off in full each month. It’s also worth setting up a direct debit to ensure you are never late making a payment - this will help protect and improve your credit score.

If, by using one of these cards, you can demonstrate that you can manage credit responsibly it should increase your chances of being accepted for a more competitive deal in the future.

The Capital One Classic card has a representative APR of 34.9% (variable). Unusually for bad credit credit cards, it offers a 0% period on purchases until August 2012 which could be useful if you want to make a large purchase.

Another option is the Aquis card. The representative APR is lower at 29.8% (variable) but there is no 0% period.

Find out more about these and other credit builder cards.

Every week, Clare Francis, financial journalist and editor of comparison site moneysupermarket.com will offer tips and advice on all things money-related to help iVillagers make the most of their hard-earned cash. From energy bills to car insurance; credit cards to children’s savings accounts; mortgages to discount vouchers Clare will show you how to make sure you’re getting the best deal.
Next Up: 10 ways to avoid credit card debt