Comparing credit cards | Protection and rights offered with credit cards

Credit cards: overlooked rewards

Some credit cards are overlooked because the APR or introductory offer isn’t as eye-catching as its competitors’ – be sure to get a closer look

When searching and comparing credit cards, many consumers search for the best balance transfer credit cards or the best credit cards for improving bad credit.

However, there are some credit cards that don’t completely follow the rulebook and – if you know what details to look out for – could improve your finances in the long run.

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Our guide will help you identify the rewards and benefits that often get overlooked when comparing credit cards.

Credit cards for loans

If you’re planning on making a big purchase (but not too big), such as a television or furniture, then a low APR or 0% purchase credit card is usually the way to go.

Instead of taking out a loan, you can make an interest-free or low-interest purchase on your credit card.

One problem with 0% purchase credit cards is that the introductory interest-free period is sometimes used to simply pull in consumers for the long haul, which then includes paying a larger APR.

However, if you manage your money well and are sure that you’ll be able to pay it off in the 0% purchase period, then it could work in your favour.

Meanwhile, low APR cards can sometimes work out better if you’re confident of paying off your debt within a reasonable amount of time.

Typically, low APR cards come in at just under 8% APR.

But some introductory APRs can be maintained for the entire repayment term, eg if you make a purchase within the 90-day introductory offer period, you can continue paying back the debt for as long as it takes at the introductory rate.

There’s a whole range of credit cards that can be used as a 0% or low-interest loan, so it’s worth shopping around for the right introductory rate or long-term deal that suits your needs.

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Credit cards for bad credit

Credit cards for people with bad credit are widely available on the market as consumers with less than perfect credit histories seek to improve their status.

These credit cards are usually open to people who have had County Court Judgments against them and who may have missed payments or even faced bankruptcy in the past.

This availability comes at the cost of a higher than average APR.

Consumers might just be looking to get some quick and easy credit to tide them over until next payday and the high APR of the bad credit cards market can make these cards less appealing.

When comparing bad credit cards, it’s worth looking past the high APR before coming to a decision, as you may miss the details that could help you reap better rewards.

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Decide whether or not the card suits your lifestyle and financial requirements

The monthly repayments are also designed to be predictable and responsible, which can help consumers manage their finances better.

While consumers turn to payday lenders for easy credit, they risk losing control of their financial situation and worsening their credit status with unexpected debts spiraling.

Credit cards such as shout require debit card details as a pre-condition for approval, meaning the repayments of £15 for every £100 come out of your account automatically each month.

Other benefits with credit builder cards can include interest free purchases. But it’s important to note that the interest free purchase period is usually an introductory offer and if you don’t stay on top of your finances, can come back to hurt you with a very high APR.

However, the opportunity to increase your credit limit is there as an incentive to keep up your repayments.

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Balance transfer cards

Long balance transfer periods can be appealing but often come with large transfer handling fees, so finding a happy medium can be quite time consuming.

This means that although you have typically over two years to pay off your balance with no interest, you could be paying a large chunk upfront for the privilege, and will typically pay higher rates of APR once the 0% period expires.

Some cards have no window of zero interest on balance transfers, instead offering low rate “for life”, which can be useful for helping to keep in control of your finances in the long term.

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Find a balance transfer credit card with a the lowest transfer fee or longest 0% interest period.

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Finding the best credit card for you

Ultimately, finding the best credit card for you comes down to checking all of the details, not just the top credit cards in the comparison tables, as these are often based on the longest balance transfer period or the representative APR, rather than additional benefits you could get.

Assess what you would need a credit card to do for you: transfer a balance, make a purchase with a 0% term, improve your credit rating, and so on.

After that, have a look at a credit card comparison table for that category and check the pros and cons of each card.

Pros are likely to include the key features such as length of the balance transfer period or 0% purchase period, if any, and various reward schemes and customer service benefits.

Cons will often include details such as exclusions – who can get this card and who can’t – and any features that may restricted many consumers.

Weigh these two areas against each other and decide whether or not the card suits your lifestyle and financial requirements.

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