Credit cards aren't just about spending. They are also powerful tools that, when used wisely, can help you save money, manage debt, and even earn rewards. Whether you're looking to cut down on interest payments, earn cashback on everyday purchases, rack up air miles for your next holiday, or avoid fees while traveling abroad, there's a credit card tailored to your needs.
In this guide, we’ll break down the best options on the market for balance transfers, purchases, cashback, air miles, and travel spending. We'll show you how to use these cards to your advantage, ensuring you get the most value while avoiding common mistakes.
If you're struggling to keep up with credit card payments, a balance transfer credit card can be a lifesaver. These cards allow you to transfer existing credit card debt onto a new card with a 0% interest rate for a set period, potentially saving you hundreds of pounds in interest.
Balance transfer cards can be a great tool, but only if used wisely. The key is to pay down your debt within the 0% interest period without adding more to it.
The longest 0% balance transfer period available at the moment is 29 months. That’s with both the HSBC (HSBA.L) Balance Transfer Credit Card and the Virgin Money (VMUK.L) Balance Transfer Credit Card — the latter of which is a new deal on the market. There’s no annual fee with either of these cards, but there is a one-off transfer fee.
Balance transfer offers with no transfer fee are available, but these have much shorter 0% periods. NatWest (NWG.L) is offering 13 months at 0% with no transfer fee, or Tesco (TSCO.L) is offering 15 months with a very low transfer fee.”
Best 0% purchase credit cards
A 0% purchase card allows you to make new purchases without paying interest for a set number of months. This can save you thousands compared with using a standard credit card, assuming you pay off the balance during the interest-free period.
These cards are perfect for planned, necessary purchases. Think of them as a tool for managing big buys like a new TV or essential home improvements.
Read more: What is income drawdown and how can you use it to plan your retirement?
Let’s say you take out a 0% purchase card with a 10-month interest-free period and spend ￡2,000 on new appliances. If you repay ￡200 each month, you’ll clear the debt before the interest kicks in. However, if you still have a balance after the 10-month period, you’ll start accruing interest at the standard rate, which can be as high as 27% annually.
Key points:
1. Make sure to pay at least the minimum each month to keep the 0% deal.
2. Borrow only what you can comfortably repay within the 0% period.
Stevens said: “A 0% purchase credit card can be a useful way to spread the cost of a big, planned purchase. But make sure you pay off the purchase by the end of the interest-free period, so you then don’t get hit with the credit card’s standard interest rate on any outstanding balance.
"At the moment, both the Barclaycard (BARC.L) Platinum Up To 21 Month Purchase Credit Card and the MBNA 0% Transfer and Purchase Credit Card have the longest 0% purchase period on the market, at up to 21 months. Neither of these cards have an annual fee and both revert to a 24.9% purchase rate after the 0% purchase period ends.”
Best cashback credit cards
A cashback credit card rewards you with a percentage of your spending, effectively giving you back some of what you spend. For example, if your card offers 1% cashback and you spend ￡100 on groceries, you'll earn ￡1 back. This cashback is typically credited to your account or added to your statement.
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Things to watch out for:
1. Limits: Some cards cap the total cashback you can earn.
2. Introductory offers: Cashback rates might only apply for the first few months.
3. Restrictions: Some cashback offers are limited to specific purchases or retailers.
4. Minimum spend: Some cards require you to spend a certain amount to qualify for cashback.
Stevens said: “Earning cashback on your everyday spending is a good way to make your money work a little bit harder for you. The American Express (AXP) Cashback Everyday Credit Card currently offers the highest introductory cashback rate, earning you 5% cashback on purchases (up to ￡125) for the first five months.
"After that, you can still earn 0.5% cashback on an ongoing basis, or 1% on an annual spend of over ￡10,000. There’s no annual fee with this particular Amex card either.”
Best credit cards for air miles
If you travel frequently, a credit card for air miles can help reduce the cost of flights and even unlock perks like flight upgrades and hotel stays. By using these cards for everyday purchases, you can earn points that can be redeemed for flights with your favourite airline’s loyalty programme.
How it works:
1. Earn miles: Points are usually earned based on the amount you spend and the class of your ticket — premium tickets often earn more points.
2. Redeem points: You can use points to cover the cost of flights or upgrades, though taxes and fees may still apply.
Stevens said: “Avios are points that you can spend on rewards such as flights, upgrades, hotel stays and car hire through the British Airways (IAG.L) Executive Club. With the Barclaycard Avios Card, you’ll get an ongoing earn rate of 1 Avios per ￡1 spent, plus a 5,000 Avios welcome bonus if you spend ￡1,000 in your first 3 months of having the card.
"If you spend ￡20,000 on your card within 12 months, you can also choose between a British Airways cabin upgrade voucher to use on an Avios Reward Flight or 7,000 bonus Avios.”
Best credit cards for holidays and travelling
Planning a trip abroad? A specialist travel credit card can save you a bundle by offering near-perfect exchange rates without the usual foreign transaction fees.
Read more: How to use your Avios points for more than flight tickets
Most credit and debit cards charge around 3% on foreign transactions, meaning a ￡100 purchase abroad could cost you ￡103. On top of that, some cards add a flat fee for every overseas transaction.
Specialist travel cards waive those fees, letting you spend abroad at the same rates your bank gets.
Key points:
1. Avoid cash withdrawals, as they often come with fees and interest.
2. Use the card for spending abroad to enjoy near-perfect exchange rates.
Stevens said: “The Barclaycard Rewards Credit Card and Virgin Money (VMUK.L) Everyday Cashback Credit Card don’t charge fees for making purchases overseas. Neither card has an annual fee and you could benefit from earning 0.25% cashback on your holiday spending too.
"The Barclaycard Rewards Credit Card doesn’t have any fees for withdrawing money from cash machines abroad either. Unusually, you also won’t be charged interest on cash withdrawals (like you normally would with a credit card), if you repay your Barclaycard balance in full that month.”
Whether you're looking to manage debt, earn rewards, or save on travel costs, choosing the right credit card can make a big difference to your finances. Be sure to compare offers and read the fine print to find the best card for your needs.
Disclaimer: The opinions expressed are the author's alone (unless stated otherwise) and have not been provided, approved, or otherwise endorsed by the providers listed. Yahoo does not earn any commissions from the lenders, or any other third party from the content in this series.
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