Free Credit Card Advice

Over the last few years, you may have noticed a significant rise in the number of reward credit cards on the market. This is no coincidence! There has been a general increase in the number of ways in which customers can earn money, or rewards, for their purchases. This has proven to be beneficial for the end consumer - and this is what we’re going to look at.

Just what is a reward credit card?

The typical system works in such a fashion that you get rewarded for your loyalty to a company. Whether this be my taking out a subscription or shopping there regularly, a reward credit card encourages the card holder to maintain or increase their activity in a certain chain of retail.

For example, you may have heard of the Tesco Clubcard. This is an extremely popular card for people who regularly do their shopping at Tesco, and by talking out the loyalty reward scheme, they can gain a return on the money that they spend shopping with the company. Tesco benefit from having your regular custom, and you benefit from getting a cashback return.

Some companies will offer a special 0% purchases deal to compliment their store loyalty packages. These are usually offered with an introductory period where customers can take full advantage of the interest-free rates, and providing they make the repayments in the given time period, the cards can be put to perfectly good use.

If you fail to keep up with your repayments on the debts, you’re likely to find yourself lumbered with a hefty APR.

But they’re not called reward credit cards without due reason and the good news is that these packages are generally pretty well adapted for the modern day customer. If you’re a regular customer at a particular store, you can save a great deal by signing up to their credit card schemes. Many are fully fledged credit card accounts and when combined with the loyalty scheme, you can enjoy the luxury of interest-free purchases and cashback at the end of the year.

Cashback rates vary quite dramatically. Exact figures may depend on the type of product being purchased, or the provider’s individual account policies. You can expect between 1% and 3% in cashback from your purchases. Does it sound a lot? Not really. But the whole point of a reward scheme is that the pennies soon turn in to pounds. You’ll rack up money on your reward credit card and in some instances, it’s even possible to gain interest discounts based on how active you are with the store in question.

Don’t make the mistake of spending for the sake of cashback gain though. It should go without saying that as wonderful a creation as cashback is, it isn’t fantastic enough to justify purchasing something that you don’t actually need or want! Think before you buy, and avoid cashback motivated purchases!

Most of us are ‘buy now and pay later’ people? If you are, you probably have at least one credit card and possibly a store card as well, if not more.

The question is: do you control your credit cards or do they control you?

If you feel that they control you then there are two simple ways to regain control - don’t hide your head in the sand, be proactive and do something about it!

The good news is that there are two easy ways of regaining control of your credit cards and keeping it. You can use these methods in whatever way suits you. If you want to pay off your balance in total and cut your cards up, you can do that.

If you want to reduce your card balance more quickly, you can do that. Or, if you just want to reduce the amount of interest you pay on your credit or store card debt, but continue to run a balance more cheaply, you can do that too.

The two methods you need are very simple and you may have thought about doing them before, you may even have tried them and given up. But they work best when you keep at them. The first method is to pay 0% interest on your cards. The second method is to run a monthly budget and use it to monitor and reduce your spending.

Method #1: never pay interest on your credit cards

Even if you don’t want to cut your spending, aren’t interested in saving and don’t care about the size of your credit card bill, you will still be better off not paying interest on your card borrowings.

If you have an existing balance, we recommend you transfer it to the NatWest Classic credit card, which offers 0% interest for 13 months and only charges a 2% balance transfer fee which is the cheapest on the market. Switching a balance of £3,000 from a card charging 16.9% to the NatWest card could save you £550 in interest over 13 months.

If you are about to book a holiday, or make a major one-off purchase or set of purchases, then get a credit card especially for the job. We recommend the Sainsbury’s Bank Mastercard which charges 0% interest for 10 months on new purchases and has a low rate of 5.9% for the life of any balance transfer.

For actual holiday spending, we recommend the Post Office credit card which does not charge a foreign exchange fee on foreign purchases, saving you 2.5% a time. The Post Office card also offers 0% interest on balance transfers for 10 months.

Method #2: do a budget and it is easy to spend less

Budgeting is simple. Once you have done it you will be amazed you never did it before.

If you find that the credit card comes out of your wallet or purse every time you are in a shop or bar then you are probably spending too much. You can’t cut your spending unless you know where the money goes each month.

Make a list of all your monthly outgoings, either as an excel document, or by hand. These should include everything from mortgage repayments through to takeaways and gym memberships.

Once you have filled in all of the relevant costs, add them all up and subtract the total from your monthly take-home pay.

Are you overspending each month? If you use your credit card a lot then the answer is probably “Yes”.

Even if you are not overspending, how much do you have left over each month? Is it enough to add to your savings? You do have savings don’t you?

There are literally hundreds of credit cards on offer in the UK, and the list is growing daily. So, which is the best on offer? The choice depends on the person applying for each card, or using each card. Really, you need need to ask yourself: “What do I want to use a credit card for?”

1. For purchases, and to spread the cost of these purchases over time
2. As a source of spending in between paydays
3. To pay off non-credit card debts

Not a Debt Solution

If the answer to the question is number 3, stop right now. Credit cards are not designed as a debt solution - in fact they’re the last thing you should use. Anyone seeking relief from debt should contact their a debt advisory service, such as National Debtline, for free, independent advice.

1. The Popular Answer

All credit card companies hope potential customer will choose answer 1, because that’s the way they make their money. By making purchases, the card holder borrows money from the credit card company, which accrues interest every month. The longer the card holder takes to pay it back, the more interest they pay, and so it’s more profitable for the credit card company.

2. The Unpopular Answer (for the credit card companies)

Answer 2 presumes that, come payday, the card holder will pay off all they owe in full and start again afresh the next month. These card holders are, in effect, borrowing money for free, IF the credit card allows an interest-free period of no less than 30 days. Without an interest-free period, interest will be charged.

An Interesting Way to Spend

Since the advent of Chip and Pin, credit cards have become a safe, reliable and easy way to purchase almost anything in person. Online, if used with care, they also offer a secure and effective way to purchase anything from anywhere in the world.

For a card holder who doesn’t intend to pay off all their debt at the end of the month, the most crucial element of any credit card deal is the interest rate. Credit cards interest rates are shown as Annual Percentage Rates (APR’s). Every month, that rate of interest is charged on the outstanding balance on the card. The cardholder can either pay off all the balance due, part of it, or a specified minimum repayment.

Borrowing for Free

A credit card that offers an interest free period is an ideal way to borrow money for free, if the balance is paid off in full at the end of every month. It takes a strong-willed card holder, however, to resist the temptation to spend just a little extra and go over their monthly budget!

More than just Credit

Credit card companies are falling over themselves to attract new customers, and they offer a wide selection of incentives.

0% purchase offers are extremely tempting, and rightly so. For a fixed period, all purchases are interest free, so the card holder need only pay the minimum payment to borrow money for free. The trick is to repay the balance just before the 0% deal expires.

Cashback credit cards offer just that; a percentage of the card holder’s spend during the month, given back as cash. For the high spender who repays all or a substantial amount of the balance each month, this is an attractive offer.

Card reward schemes vary in generosity. They either offer reward points, which can be redeemed towards items from their own catalogue, or money off particular items or services. Reward schemes are particularly useful when looking for good discounts on specific products, such as a car.

Balance transfer deals allow existing credit card holders to transfer their debt from one card to another. However, there is a catch; repayments made go against the cheaper interest option first, usually the balance transfer. Purchases attract higher interest and are paid off last.

Insurance deals include free travel insurance for holidays purchased using the card. Purchase insurance is also a useful perk, especially with more expensive goods, but only if not covered by any other insurance policy the purchaser might already have.

A recent bone of contention has been the cost of using a credit card abroad, and especially the high fees charged for withdrawing cash against the card on foreign ATMs. Certain cards offer this service at a reduced cost and are worth seeking out if the user frequently travels abroad.

Balance Transfers are one of the most potent weapons in a credit card companies arsenal to entice you to sign up to their card. In recent years, with historically low interest rates and fierce competition between credit card companies for your balance transfer many companies now offer balance transfer rates of 0% for up to 9 months. So what exactly is a credit card balance transfer. Quite simply it is transferring an existing balance from one credit card to another. In the process swapping from a high interest rate to a low one. If you have a credit card with an outstanding balance and you are not on the introductory rate then you need to transfer that balance to another card with a low balance transfer rate now! It could literally save you hundreds of pounds a year in interest charges.

There are 2 types of balance transfer offer. Most last for a fixed period of time, say 5 - 9 months after which they revert to the standard interest rate on the card. these are fantastic value as most offer 0% balance transfers for the introductory period. it is important to remember that after the introductory period the rate will be at the higher, standard rate normally around 15% APR. The best idea is to keep switching the balance between different credit card companies and use the special balance transfer rates to pay no interest until you pay off the debt.

However, this does involve considerable commitment on your part to make sure you change the card every 6 months or so, otherwise you will end paying a high rate of interest - exactly what the credit card companies want!

Another option, if you don’t think you can commit to changing cards regularly is to go for a long term balance transfer rate. These don’t last for a few months but apply until the balance is paid off on the card. These are typically around 3-5% APR and will save you money if you feel switching cards is not right for you. You need to be aware however, that any payments you make come off the balance transfer funds first so any spending on the card may be charged at full interest.

See our guide to the best balance transfer credit cards for more details or see the options below.

Gold credit cards are offered by many of the UK’s leading banks. Once the preserve of the very rich (or the very indebted) they are now offered to more and more customers - often as nothing more than a marketing gimmick. Indeed the rates offered on gold cards are no different to companies standard credit cards. And while some gold cards are competitively priced they can can often been beaten for rates by many of the “normal” credit cards on the market.

However, in some cases a gold card can make a great deal of sense, especially if you hanker for that extra bit of exclusivity when you pull your credit card from your wallet. There are generally more restrictions on gold cards usually dictated by personal income. A ball park figure of around £20,000 per annum income is required on many gold credit cards. We have listed some of the best gold card offers below.

Sometimes we all get into trouble managing our credit and in this day and age its all too easy to get a poor credit history. Simply missing a few minimum payments on your credit cards can affect your credit history and once you get on a downward spiral it extremely hard to get out of.

Read our guide to bad credit history to find out how to get your poor credit history or ccj’s, or anything to do with poor credit back on track.

So you have decided its time to get your bad credit history in order and now you need a credit card to finally put your credit record on the right track. But its not always that easy. Most of the mainstream credit card companies will not lend to anyone with a poor credit record. Fortunately there are some companies that take a flexible approach to credit scoring even if you have been turned down for a credit card in the past.

The interest rates charged on these products are higher than you would normally find on other credit cards to reflect the credit builder nature of these products. The important thing to remember with these cards is to use them as a vehicle to rebuild your credit history not simply compound your existing problems so use them wisely!

If you want to know what your credit score is, find out today with an Equifax Credit Report Now!

To apply for a credit card even if you have bad credit, you should try the Vanquis Abacus Credit Card.

If you are one of the lucky, or financially frugal people who always manage to pay off your credit card every month it can be extremely difficult to find out which is the best credit card for you. After all, most adverts you see these days make big news of 0% offers or low standard rates which actually doesn’t make a difference to you as you never get charged interest anyway.

That’s where the reward / cashback based credit cards come in. These offer the credit card holder a reward - be it cashback or some sort of points program.

Always keep in mind that these cards generally have a higher interest rate than others on the market and if you do carry a balance on your card the interest you will be charged often outweighs any rewards that are offered and you could save more money by switching to a cheaper credit card.

All the reward cards be they cashback or points based work in a similar way. For every pound you spend on the card (generally excluding balance transfers) you will a certain proportion of that spend as cashback or points which can be redeemed in different ways depending on how the individual scheme operates.

The value and merits of each reward scheme are very hard to compare (apart from straight cashback schemes) as they vary enormously in terms of points earned and how these can be redeemed.

Platinum credit cards are offered by many of the UK’s leading banks. Once the preserve of the very rich (or the very indebted) they are now offered to more and more customers - often as nothing more than a marketing gimmick. Indeed the rates offered on platinum cards are no different to companies standard credit cards. And while some platinum cards are competitively priced they can can often been beaten for rates by many of the “normal” credit cards on the market.

However, in some cases a platinum card can make a great deal of sense, especially if you hanker for that extra bit of exclusivity when you pull your credit card from your wallet. There are generally more restrictions on platinum cards usually dictated by personal income. A ball park figure of around £20,000 per annum income is required on many platinum credit cards. We have listed some of the best platinum card offers below.

If you run a small business or a company a credit card could be a vital tool to enable you to both spend easily on your business and keep those important records of your spending.

Business credit cards are not the only option however. If you are a small business why not get a normal credit card and use it solely for business use. In that way you get most of the benefits of a company credit card with the bonus of features and benefits of 0% interest.

A few companies such as barclaycard specialise in student credit card cards. However other companies may also offer students a card depending on their status. Most credit cards do require a minimum income before they will accept your for a card however.