When choosing the best credit card from the wide array available, it is first useful to consider what a credit card is and how credit cards work.
What is a credit card?
In essence, credit cards provide a tool to help people manage their finances by borrowing money up to a set credit limit that is then paid back in full or spread over monthly instalments. The amount that needs to be paid back will be determined by the interest rate as well as any special offers, which often include interest-free periods when you first take out the card.
Credit cards fall into a number of different categories, including balance and money transfer options that allow you to manage existing debts or short-term cash-flow issues. There are also cards designed for those purchasing big-ticket items that offer low rate or 0% interest periods, as well as those that provide cashback, rewards and other perks. Finally, some cards are designed specifically for business users, travellers or those looking to build their credit rating.
Here we help you navigate the UK market to help you find the best credit cards for you. These specific cards have been chosen by considering factors including the interest rate, annual fees, introductory offers, interest-free periods, rewards and cashback.
Best 0% purchase credit card
- Best for: Spreading the cost of large purchases
- Representative APR: 21.9% variable
- Interest-free period: 0% interest on purchases for 20 months. 0% on balance transfers for 20 months, subject to 2.9% fee
- Perks: Collect one point for every £1 you spend in M&S and for every £5 with other retailers. A bonus introductory points voucher for 500 M&S points (worth £5) when you spend on food, clothing or home at M&S.
- Annual fee: £0
- Why we like it: It offers one of the longest interest-free periods and, unlike its rivals, this is guaranteed rather than subject to status. It also has a slightly lower APR after the interest-free period, as well as allowing you to earn points as you spend
For other best-buy 0% purchase options, see our article “Compare the best 0% purchase credit cards“
Best 0% balance transfer credit card
- Best for: Reducing the cost of existing debt with a lower-than-average handling fee
- Representative APR (after interest-free period): 21.9% variable
- Interest-free period: 0% interest for 29 months on balance transfers made within first 60 days of account opening, 2.75% balance transfer fee (minimum £5). 0% interest on purchases for 3 months from account opening
- Annual fee: £0
- Perks: Cashback on selected brands through Visa Offers, discounts on dining, travel and shopping in the UK and abroad with HSBC’s Home & Away rewards programme
- Why we like it: While the M&S card is a better overall option for a combination of 0% purchase and balance transfers, if you are just looking for balance transfers HSBC gives a longer interest-free period and slightly lower transfer fee
For other balance transfer options, see our article ‘Best 0% balance transfer credit cards’
Best money transfer credit card
- Best for: Paying off more expensive debts
- Representative APR: 22.9%, based on the individual circumstances of the applicant
- Interest-free period: Up to 18 months, depending on individual circumstance
- Transfer fee: 2.99% or 3.49%
- Key information: 0% only applies to money transfers made in the first 60 days of the account opening
- Why we like it: It offers the longest interest-free period (although you could be offered 14 months) and has one of the lowest handling fees of cards within this category.
For more details on money transfer cards, read our article ‘A complete guide to the best money transfer credit cards’
Best credit-building credit card
- Best for: People with poor or no credit
- Representative APR: 27.5% variable
- Starting credit limit: £200 to £1,500, monthly repayments from £25
- Eligibility: Minimum annual income of £5,000, CCJs considered if more than 18 months old
- Perks: Collect Tesco Clubcard points, track spending through the mobile app, 3 years of free access to your credit report and score
- Why we like it: Although it is slightly more stringent on who it will accept, Tesco offers one of the lowest APRs and also offers the added bonus of Tesco Clubcard points and access to your credit report and score
Read about the best options for those with bad credit in our article ‘Compare the best credit cards if you have bad credit’
Best cashback and reward credit card
- Best for: Fee-free cashback and perks
- Interest rate: 24.5% APR variable
- Cashback: 5% cashback on purchases (up to £100) for the first three months, falling to 0.5% on spending between £0-£10,000 and 1% on everything over £10,000 after the introductory period. Minimum £3000 spend and cashback paid after 12 months
- Rewards: Offers and discounts with selected travel and retail partners, as well as pre-release tickets to music, cinema and theatre through American Express Experiences
- Interest-free period: Maximum 56 days on purchases if you pay in full each month (22.2% APR variable on purchases)
- Annual fee: £0
- Why we like it: American Express is known for its market-beating rewards schemes and this card does not disappoint, combining attractive cashback and rewards without the high annual fees attached to some of its other cards.
Read about the best cashback and reward credit card options in our article “Compare the best cashback and reward credit cards“
Best travel credit card
- Best for: Earning as you spend abroad and in the UK
- Foreign transaction fee: 0%
- Cash withdrawal fee: 0%
- Representative APR: 22.90% variable
- Cash withdrawal APR: 27.90% variable
- Perks: Earn 0.25% cashback on everyday spending (excluding balance transfers, money transfers, cash withdrawals, buying currency or travellers’ cheques or gaming-related purchases. Save money on live events with Barclaycard Entertainment
- Why we like it: For those able to pay off the balance in full each month, this card allows you to earn cashback and enjoy rewards while also not charging foreign transaction or cash withdrawal fees
For a comprehensive review of travel credit cards, see our article “Compare the best travel credit cards“
Best low-rate credit card
- Best for: Minimising charges if you can’t pay off the full balance each month
- Balance transfers: 4.9% for 48 months (0.5% fee for transfers in first 60 days), reverting to 8.9%
- Money transfers: 4.9% for 48 months, reverting to 8.9%
- Purchases: 4.9% for 48 months reverting to 8.9%
- Annual fees: £0
- Why we like it: For those who choose not to switch between interest-free introductory offers, MBNA provides a consistently low APR for a long period, which allows you to budget more easily
Best business credit card
- Best for: Businesses looking to earn rewards
- Representative APR: 39.90% variable
- Annual fee: £99
- Credit facility: Up to £100k
- Perks: No FX or UK ATM charges, up to 20 free supplementary cards, 1% cashback or 1 Avios point for every £1 spent and 10,000 bonus points when you spend £5,000 in the first 3 months
- Why we like it: In a crowded space, the Capital On Tap Business Rewards card represents the middle ground between no-frills, fee-free options and the all-singing, all-dancing rewards cards with budget-busting annual fees
Find other best-buy business cards in our article “Compare the best and cheapest business credit cards“
Best student credit card
- Best for: Students looking to foster good credit habits
- Representative APR: 18.9% variable
- Credit limit: Up to £500 credit limit, subject to status
- Perks: 0% interest if you pay the balance in full each month
- Annual fee: £0
- Why we like it: Offering a sensible credit limit and the incentive of being interest-free if you pay off the balance in full each month, it is a good first foray into credit cards for cautious young people
Best all-round credit card
- Best for: Ticking all the boxes
- Representative APR: 23.7% variable
- Interest-free period: 0% interest on balance transfers for 26 month, 0% interest on purchases for 20 months
- Perks: 0.5% cashback on all purchases, no foreign transaction fees on purchases made abroad in local currency, access to Santander’s “Retailer Offers”, with up to 15% cashback at a variety of major retailers when using your card, plus 25% cashback on five welcome offers.
- Annual fee: £36
- Why we like it: This card manages to combine a long interest-free period, reasonable APR and cashback without it feeling compromised
How to pick the best credit card
When looking at the options available, the first point to consider is: do you need a credit card? Can you afford to take on the debt and service the monthly repayments? Are there other financial products, such as personal loans, which may better suit your needs and cost you less? While credit cards have many benefits, they are not suitable for everyone and can lead to serious financial problems if misused or mismanaged.
Pros and cons of credit cards
- By using a credit card for purchases between £100 and £30,000 you are protected under section 75 of the Consumer Credit Act if the goods or services are faulty, aren’t delivered as promised, aren’t as advertised or if the trader or retailer goes bust.
- Sensible use of credit can help improve your credit score, which could help secure loans, mortgages or other borrowing in the future.
- Credit cards can be used to reduce or pay off other debts, such as personal loans, store cards or payday loans. By making the most of interest-free periods, you can make a sizeable saving and potentially pay off debts sooner.
- If you can pay off the card in full each month, you can benefit from great cashback and reward deals from many providers
- Credit cards can be expensive, with interest rates and fees often making them more costly than other borrowing options
- If you aren’t careful, it can be easy to get caught in a spiral of debt if you start to miss payments or borrow more than you can reasonably pay off. In the long term, this can affect your credit score and may impede future borrowing. If you find yourself in this situation, look at our article on
How to get accepted for a credit card
The process of applying for a credit card is relatively quick and straightforward, with many online applications letting you know immediately if you have been accepted. Typically you will have to provide your name and address, date of birth, nationality, employment status and salary or income. Some applications may require extra proof of identification, such as a copy of your passport, driving licence, bank statement or recent utility bill.
Things to consider before applying for a credit card
Before you submit the application, it pays to consider your eligibility and likelihood of being accepted as failed applications will appear on your credit record. A good place to start is checking your credit score through services such as Experian, Clearscore or Credit Karma, which will give you a good indication of how likely you are to be successful.
In addition, many card providers also offer online eligibility checkers which can tell you how likely you are to be accepted without leaving a footprint on your credit record. The golden rule is: if you are turned down for a credit card, don’t apply for any more. Instead, consider asking the provider why you were rejected and see how you can improve your credit score. There is great advice on how to do this in our article “How to improve your credit score quickly“.