Credit cards aren't just about spending. They are also powerful tools that 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.
Best 0% balance transfer credit cards
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.
However, there are some crucial rules to follow to make the most of these deals:
Always pay the minimum monthly repayment: Missing a payment could result in losing your 0% interest deal, incurring fines, and damaging your credit score.
Clear the debt within the interest-free period. To avoid paying interest after the promotional period ends, make sure you can pay off the entire balance within the 0% timeframe.
Don’t use the card for new purchases. The 0% deal usually applies only to transferred balances. Using the card for new spending could lead to hefty interest charges.
Check your credit score. The best deals are often reserved for those with a strong credit rating, so it's worth checking your score before applying.
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.
Emily Herring, a credit card expert at personal finance comparison site finder.com, said in this Halloween season: "Spook away high interest by transferring your credit card balance to a 0% interest card, giving you time to pay it down without any financial frights.
"Currently, the longest interest-free balance transfer period available is 29 months, offered by Virgin Money(VMUK.L), HSBC (HSBA.L), and Barclaycard(BARC.L). None of these cards carry an annual fee, although they do charge a one-time balance transfer fee.
"Alternatively, if you prefer no transfer fee, NatWest (NWG.L) provides a 0% interest period of 13 months, while Tesco (TSCO.L) offers 15 months with a very low transfer fee—though these periods are shorter than the maximum available.”
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.
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.
Herring said: “A 0% purchase credit card can be a 'fang-tastic' tool for spreading out the cost of a large, planned expense. To avoid incurring the card’s standard interest rate, aim to pay off the entire balance before the interest-free period ends.
"Currently, Barclaycard and MBNA offer the longest 0% purchase period available, lasting up to 21 months. But beware! Both cards have no annual fee and revert to a 24.9% purchase interest rate once the 0% period expires.”
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.
Read more:
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.
Herring said: “Why not give your wallet a ‘treat’ with cashback on your everyday spending? The American Express Cashback Everyday Credit Card currently offers the highest introductory cashback rate, earning you 5% cashback on purchases (up to ￡125) for the first 5 months.
"After that, you can still earn 0.5% cashback on an ongoing basis, or 1% on 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.
Herring said: “Until 18 November, Virgin Money is running an enhanced welcome bonus with its Reward Plus card, which can net you an impressive 30,000 points provided you spend ￡3,000 in your first 90 days (or 18,000 points if you don't).”
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.
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.
Herring said: “The Barclaycard Rewards Credit Card and Virgin Money Everyday Cashback Credit Card don’t charge any ghoul-ishing 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. So, go ahead and enjoy a spooktacular trip without any frightening fees!"
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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