Ten of the best credit cards for your finances in 2012
Thursday, 02 February 2012 02:23
By Kate Saines
Believe it or not, switching to a new credit card could be a smart way to shift some of your New Year debt.
This is because, at the moment, the average promotional length on credit cards is at an all-time high.
So, if you’ve got a good credit rating and are looking for a card charging zero per cent on purchases or transfers you won’t have to look far to find deals lasting well over 20 months.
But it’s not just the ‘zero per cent’ market where there are good deals to be had. There are some competitive incentives being offered by the cashback and rewards credit card providers too.
However, to really benefit from these credit cards, you’ll need to be shrewd. And this includes making sure the card you take out is suitable for your financial needs.
There’s no point in taking out a credit card offering zero per cent on balance transfers for three months if you know it’ll take more than three months to repay the balance.
Likewise, if you are unable to repay the balance in full every month, cashback credit cards will simply not work for you as the interest will likely be more than the reward.
We’ve rounded up some of the best credit cards on the market to give you an idea of the deals which are out there and who they are most suitable for.
0% Credit Cards
Barclaycard Platinum Visa
This credit card offers zero per cent on balance transfers for 24-months and zero per cent on purchases for three months. This makes it the longest balance transfer credit card on the market at the moment.
This card is ideal if you think you’ll need as many as two years to repay debt from the card or cards you are transferring the balance from. Beware, however, as you cannot transfer balances from other Barclaycards.
It’s also worth knowing a balance transfer must be carried out within the first 60 days of taking out the card or the zero per cent deal will not apply and there is a 3.2 per cent handling fee.
For a lower fee of 2.9 per cent you can transfer your balance to Barclaycard Platinum’s 22-month version – the Extended Balance Transfer card - or the 21-month version which has a 2.6 per cent fee.
You’ll also need to be over 21, earning an annual salary of £20,000 and have a good credit rating to qualify. After 24-months the APR on the card is 17.9 per cent.
Halifax Balance Transfer Mastercard
Sign up to this one and you’ll receive zero per cent on balance transfers for 22 months, and zero per cent on purchases for three months.
Like the Barclaycard, it’s great for people who have debts on other credit cards and would benefit from interest-free repayments to help them eradicate or reduce the amount.
There is a 3.5 per cent handling fee which you must pay when transferring the balance. And, after 22 months, you’ll start paying interest at 17.95 per cent so it’s worth paying off those debts in the 22-month zero per cent period.
To qualify, you’ll need a salary of £20,000 or more and you must also be over 18.
Nationwide Select Visa
Nationwide’s offering has the longest zero per cent on purchases period of any credit card on the market.
In fact you’ll pay no interest on purchases for 18 months as well as benefiting from 0.5 per cent cashback and unlimited commission-free purchases abroad. It also comes with zero per cent on balance transfers for 17 months.
Once the zero per cent periods expire, the APR is a low 12.9 per cent.
What’s the catch? Well, you’ll need to be a Nationwide Flexaccount customer, with at least £750 going into your account each month, to benefit. Plus balance transfers will set you back a 2.95 per cent fee, with a minimum charge of £5.
Nationwide are looking for customers with a good repayment record too. If you’ve missed three or more payments on any credit contract over the last year you will not be able to qualify.
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Marks & Spencer Money Mastercard
As well as zero per cent on purchases for 15 months you’ll also benefit from M&S rewards when you take out this card.
So, you’ll receive one point for every £1 spent in M&S and for every £2 spent elsewhere. These points are redeemable at M&S.
This card is ideal for anyone who is a regular M&S shopper. However, the APR after 15-months is 15.9 per cent. Lower than most, but you should still make sure you clear your debt before this time, and repay your balance in full after this time to benefit fully from the rewards.
Cashback Credit Cards
Capital One World Mastercard
Consumer group Which? recommends this provider and the card comes with a high customer satisfaction score.
Take out this card and you can earn five per cent cashback on the first £2,000 you spend on purchases in the first three months.
After this time there is the potential to earn up to 1.5 per cent cashback if you spend over £10,000. Those spending under £6,000 will earn 0.5 per cent cashback.
There is no annual fee but interest on purchases is 19.9 per cent. However, to benefit from any cashback it’s important you repay your balance in full each month.
It’s also worth noting there is a cap on the amount of cashback you can earn during the introductory period. The most cashback you can claim is £100, so you’ll reach your limit if you spend £2,000.
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American Express Platinum Cashback Card
For long-term alternative, American Express offers a good deal on cashback. You’ll receive five per cent cashback on purchases for the first three months, up to a maximum of £100.
After this you’ll receive 1.25 per cent cashback on all purchases, no matter how much you spend.
Cardholders can also receive a loyalty bonus of 2.5 per cent during their anniversary month every year, with no upper limit to the amount of cashback that can be earned.
The representative APR on this card is 18.5 per cent, which includes the £25 annual fee which is charged to cardholders. The purchase APR is 14 per cent.
This card is ideal for big spenders. But you’ll also need an annual salary of at least £30,000 and an excellent credit rating to qualify.
Santander’s 123 Cashback Mastercard
You will receive one per cent cashback when you make purchases in supermarkets, two per cent when spending on the card in department stores, and three per cent when purchasing fuel (capped at £300 a month).
This card is a financially sound choice for anyone who spends a lot on petrol or diesel each month. However, it also comes with an APR of 18.9 per cent and includes a £24 annual fee. So if you don’t spend much on it, you’ll pay more in fees than you receive in cashback.
Also, unless you use the card at supermarkets, department stores or petrol stations you’ll not earn any cashback.
Read more: Personal loans: Six of the best
Rewards Credit Cards
There are a variety of reward credit cards on the market but as to which offer the best deals, that will depend on the customer and where they do most of their spending. This is because many tend to offer rewards for spending at specific places. And these rewards will come in the shape of store vouchers, airmiles or other specific products or services.
If you tend to use your credit card most for supermarket shopping, a Tesco or Sainsbury’s credit card offering rewards for shopping in store will be best value for money for example.
We have highlighted the three below because they provide an overview of what’s available in the rewards credit card market. However, if you tend not to shop in the stores or places they offer rewards for, it might be worth looking elsewhere.
Tesco Clubcard Credit Card
You will receive one point for every £4 spent anywhere – not just in Tesco stores. The fact the card doubles as a Clubcard, however, means you’ll receive the one point for every £4 plus your standard points.
Rewards are received as vouchers for Tesco shopping but they can also be exchanged for holiday discounts, meals and experiences at other specified locations.
The card also comes with zero per cent for 15 months on purchases, and zero per cent for nine months on balance transfers. After these periods the APR is 16.9 per cent.
NatWest Yourpoints World Mastercard
This one is ideal for travellers as you can exchange points through ebookers.com and Easyjet. However, you can also earn vouchers for places like M&S, Amazon and Boots – so this is a good choice for regular shoppers at these stores.
The deal is for every £1 you spend you’ll receive one point, no matter where you use the card. Plus there is a currently an introductory offer on the table which means new customers will receive 2,500 points.
There is zero per cent on purchases and balance transfers for 13 months, after this you’ll pay an APR of 17.9 per cent. There’s no annual fee but you’ll pay 2.9 per cent to transfer balances.
AA Rewards Credit Card
You will earn one point for every £2 spent on this rewards credit card. However, you’ll receive two points for every £2 spent on fuel and motoring purchases – so this is another card which will benefit motorists more than anyone else.
Rewards come in the shape of high street shopping vouchers and cashback. Plus there is also zero per cent on purchases for ten months and zero per cent on balance transfers for 12 months (with a three per cent fee). The APR after this time is 16.9 per cent.
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