Top tips for choosing credit cards

Balance transfers – avoid paying interest by switching credit card providers before the introductory low or 0% interest rate runs out.

Interest rates – be careful as some offers only relate to balance transfers and not new purchases. Ideally you want a good introductory rate and a competitive ongoing rate. When comparing interest rates always use the APR (Annual Percentage Rate) because this allows you to make like-for-like comparisons. By law, companies have to publish their APR.

Annual Fees – never choose a credit card that charges an annual fee – most of the newer, more competitive cards don't charge them.

Cash withdrawals – most credit card companies charge around 2% a month for drawing out cash using a credit card, representing poor value for money.

Using your credit card abroad – credit cards are very handy to use abroad however there will be charges and catches similar to those that apply when withdrawing cash, so be sure to check out the small print, and your alternatives, in advance.

Loyalty schemes – these kinds of credit cards are only really worth it if you use your credit card on a regular basis, otherwise the benefits of extra points or cash back will be marginal.

Insurance – this can be a useful benefit and many major credit card companies offer free insurance on any goods over a certain amount bought using their card. You can also get free travel insurance with some credit cards.

Did you know?

• On June 29th 2004 the Bank of England announced that UK debt stands at £993bn, just short of the £1 trillion milestone, now expected next month.
• There are more than 90 million credit, debit and store cards in the UK.
• Approximately half of the UK population owns a credit card having, on average, two cards each.
• 50% of those who have a credit card pay the balance off in full every month.
• The average balance of a UK cardholder is £1,140.
• Approximately 13,000 credit cards are stolen in the UK and Ireland on a daily basis.

Bad Credit history?

Don’t let a bad credit history stop you from getting a credit card. If you have any of these problems you will still be able to get a credit card:

• Mortgage Defaults or Arrears
• Adverse Credit and Finance
• Poor Credit History
• CCJ's
• No Proof Of Income