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Credit cards are one of the most popular forms of credit available in the UK with more than 30 million of them in circulation across the country. From humble beginnings as a Diners Club Card in the 1950s, they now come with a huge selection of optional extras that can help you to manage your credit more efficiently whilst benefitting from a host of rewards.
Getting the right credit card has never been easier thanks to our comparison service. You can even apply online for an instant decision without the hassle of paperwork and long, drawn out sales calls.
How Do Credit Cards Work?
Credit cards offer holders an easy way to spend money in-store and online. Unlike debit cards which only allow you to spend money that is in your account (including an agreed overdraft) credit cards let you make purchases which are then paid off partially or in full at the end of each month.
Interest is usually paid back on top of the amount borrowed, although the vast majority of providers won’t charge you a penny as long as the outstanding balance is cleared each month.
You’ll also receive added protection through the Consumer Credit Act. This means that all credit cards must provide protection on purchases of between £100 – £30,000, giving you the peace of mind that you’re covered should your goods be faulty or not arrive at all.
But what type of card should you consider applying for? Take a look at the different types of credit card below and find the perfect financial buffer for your needs.
0% Interest Credit Cards
When checking out the latest credit cards, one of the most important criteria to take into account is the interest. This is the amount extra that you’ll pay on top of what you spend each month.
However, the great news is that not all credit card providers will often waive interest so long as you meet specific criteria. The most common 0% interest credit cards are for balance transfers. Simply switch your existing line of credit over to a new credit card and you may benefit from 6, 12 or even 18 months of zero interest repayments.
The same can be said for those who clear their entire outstanding balance each month. Whilst this isn’t a strict rule for every type of card, most won’t charge interest or fees as long as everything borrowed is paid back on time.
Bad Credit Credit Cards
One of the big misconceptions about credit cards is that they’re only for people with an excellent credit history. Whilst your credit score is of course taken account when applying for credit, there are plenty of specialist providers who solely deal with bad credit credit cards.
You may start with a smaller credit limit than with a standardised card, however you’ll be able to increase this over time as long as you make regular repayments and don’t stray above your allocated limit.
These card types can also be an excellent solution for those who are new to correct and are looking to build their credit score for the future. Bad credit credit cards can be used in exactly the same way as other types of card with the same purchase protections and ability to withdraw cash advances if needed.
Reward Credit Cards
As credit cards have evolved over the years, they have also taken on new features and benefits which reward consumers based on their spending habits, or in return for a small account fee.
From financially rewarding bonuses such as 0% interest rates and cash back on purchases to free cash withdrawals abroad and air miles, there are plenty of reasons to switch your spending to a reward credit card in the future.
Most reward credit cards can be managed online, giving you access to the latest savings and deals that are most applicable to you.
Pre-Paid Credit Cards
Pre-paid credit cards have taken off in a big way over the past few years with the likes of Visa and MasterCard both now issuing their own versions.
These credit cards have a number of big advantages, particularly for those who are new to using plastic or struggle to get bad credit credit cards. Unlike traditional cards which allow you to spend money from an agreed credit limit, pre-paid cards require holders to load money onto the card first.
They are similar to debit cards in that you’ll only be able to spend money that you’ve placed onto the account, however you’ll benefit from the same credit card protection as with a standard card whilst also being able to spend online, in-store and around the world.
Store Credit Cards
Store credit cards are offered by major retail outlets around the world. They allow holders to spend up to an agreed credit limit in store with discounts and exclusive offers available in return.
If you tend to spend regularly in a particular shop or website then picking up a store branded credit card could help you to save money on future purchases whilst spending money with a brand that you know and trust. Most of these cards are issued by Visa and MasterCard, and operate in exactly the same way as others, aside from limiting where money can be spent.
There are multi-use store cards available which don’t have spending location restrictions, although its uncommon for you to be able to reap the same rewards as when spending in the specified store.
Personalised Credit Cards
Fancy jazzing up your plastic with a personalised design? Customised credit cards have captured a niche area in the credit card market place, offering holders the chance to reflect their personality directly onto their cards.
Whether you want your card emblazoned with your favourite football team, eye-catching design or one of your own images, this aesthetic option is ideal for those who want to stamp their mark on their cards!
Find out what credit cards are available for you today but completing the CreditRaters.com application form to get the ball rolling. We’ll do all of the legwork on your behalf to help you find a card that suits your needs whilst making the entire journey lightning fast and hassle free.