Credit cards Updated:
Almost all of us have a credit card or two tucked away, but is your plastic friend the right companion for you?
Used effectively, the credit card can be a key weapon in a personal finance arsenal, but many of us are using a credit card that doesn't actually suit our specific needs.
The most obvious example of this is people with good credit records who are using cards that either have high interest rates or have seen their introductory offer come to an end.
If that sounds like you, then it might be time to switch your balance to a 0% card, a move that could save you hundreds of pounds in the process.
0% balance transfer cards are a great way of paying down credit card balances without incurring additional interest.
The market is a hugely popular one meaning providers are keen to get custom on board.
The leading card in the market at present is the Virgin Money Credit Card MasterCard which offers 0% on balance transfers for a whopping 18 months.
Such could be used to clear debts built up on other cards; for example, somebody with an outstanding balance of £2,500 could wipe it out by paying £140 in each of the 18 months that the 0% offer lasts for.
The Bank of Scotland also offers 18 months at 0%, while Nationwide's Credit Card Balance Transfer Visa boasts a 17 month 0% period.
If you like using your credit card for purchases – all items worth £100 or more are covered with a credit card, meaning you'd get your money back if a company you've used goes bust – then a 0% purchase card might be your cup of tea.
Tesco Bank currently rules the 0% purchase roost, with its Clubcard Credit Card MasterCard offering 0% on purchases for 15 months.
For the best of the 0% balance transfer and 0% purchase worlds, Halifax's All in One MasterCard stands head and shoulders above the rest.
As the name suggests, this card is perfect for people who would like the benefits of paying 0% on a balance, but would also like to keep using their card for purchases.
The card offers holders a full 12 months 0% for both introductory balance transfers and purchases.
There are people who view their credit card as a sort of financial safety net, as something they may only use once or twice a year when they absolutely have to.
If that sounds like you, then you should consider a card that offers a low rate.
The Barclaycard Platinum Simplicity Visa offers a typical rate of only 7.9%, meaning that you can use the card from time-to-time and even if you don't clear the balance straight away, your repayment will not increase rapidly because of sky-high interest.
You can also transfer existing balances to the card, so if you don't use your card too much but are currently paying of a balance that is attracting interest of 20% or more, this could be the right option for you.
For more details on the cards, check the Moneyfacts Best Buy tables.
There you will find the best options across the credit card sector, including 0% balance transfer cards, 0% purchase cards, low rate cards, cashback cards and reward credit cards.
You will also find additional information explaining how the cards work, helping you decide which credit card is the one for you.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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