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Which credit card is right for you?

If you're in the market for a new credit card there are three distinct routes you might take, the first and most popular being the 0% on balance transfers route; this is great if you've got an existing credit card debt and want to transfer it to an interest free card. Indeed such is the popularity of hopping from one 0% card to another, the last couple of years have seen the rise of what has been charmingly dubbed 'rate tarting'. The Virgin Money credit card currently leads the way on balance transfers with a fifteen month 0% introductory period .

The 0% on balance transfers route is handy if you've got debts to pay off but not ideal if you plan on actually buying anything with your new card. If you're intent on flexing your new plastic then our second option - the 0% on purchases card - is for you. These are similar to 0% on balance transfer deals (in fact many balance transfer cards offer 0% on purchases for a limited period) but instead of not being charged interest on your existing balance you'll enjoy an interest free period on any purchases you make with it.

Our top 0% on purchases choice? The Halifax One card offers a market leading 9 months interest free on purchases as well as the same 0% period on balance transfers.

Your third option, if you aren't planning on transferring an existing balance, is a card with a reward scheme. There are plenty of reward cards littering the market offering all sorts of returns for your spending; unfortunately the vast majority of them aren't particularly great deals. Shop around though and there are some cards that are well worth investigating.

The first thing to bear in mind with reward cards is that they really aren't worth bothering with unless you pay your balance off in full every month without fail. If you don't you'll quickly find that the interest cost massively outweighs the value of any rewards you've earned. Pay the balance off however and interest ceases to be an issue. Most card providers should give you a direct debit option to pay the balance off in full every month. If they don't then you should specifically request it.

Once you've done this then you can spend as much as you want on you card without accruing additional interest costs. In fact, given that your spending is being rewarded you might as well use it for as many purchases as you can.

So, which card offers the best rewards? Well, in terms of cash rewards the American Express card Platinum is hard to beat, with 1.5% cashback and a three month introductory period of 5% - that's a relatively impressive 5p back on every £1 spent. Sticking with Amex's best credit cards, if you're a frequent flyer the British Airways American Express card is certainly worth considering. For a start you'll get 1000 bonus BA miles on your first spend followed by pretty much 1 BA mile for every pound spent on the card. You'll also get a free companion ticket if you spend £20,000 on the card within the first year of opening the account.





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