Some people need a credit card to pay for groceries, take vacations, buy household items online, or something else. We created this guide to show which kind of credit card best suits your needs.

1: Why are credit cards so important?

Credit cards are a great way to manage your spending and pay for things you want over time. Credit cards can be used to build up credit scores, but they should not be used to spend money you don’t have. It is possible to use a credit card and only spend the amount you can afford, but if it is not repaid in full each month then it can be expensive.

Each credit card offers different features. Some cards come with a 0% interest rate for a fixed period, while others allow you to transfer existing balances to be paid off at a reduced rate. You should consider what you want your card for so you can find the best deal for your needs.

2: Find ways to use credit cards wisely and gain benefits

Understand how credit cards work before you apply for them. Different credit cards have different features, and you need to be sure you are getting the one that is right for your needs.

All credit cards offer a pre-agreed credit line, such as £500 or £1,000. You can then spend using your card and the balance will go up on your account. However, you can’t spend more than your limit.

You can pay interest if you carry a balance from month to month, or have a special offer card with 0% interest for only a limited amount of time. You may also be required to make minimum monthly repayments and work to pay off the full balance each month to avoid large charges.

Some credit cards are better for people with existing debt who want low-interest rates, while other cards are for people who can pay off their balances each month and might want cash back.

3: What credit cards should I consider when getting a card?

The type of credit card you need should depend on the reason you want it. If you’re trying to pay off your debt or make new purchases, for example, then a balance transfer or 0% interest card may be a good choice for you.

One of the reasons you might want a credit card is for cash back. Other reasons include reward points, applicability to online vendors, or special financing.

⦁ How to reduce the cost of an existing debt

You may be able to benefit from a balance transfer credit card if you have an existing balance that you want to pay off quicker or with less interest. Many balance transfer cards come with low or 0% interest rates that can range anywhere from 0-24 months. This means you’ll be able to transfer your existing debt onto the new card and pay it off at a lower or 0% rate. Consider deals with the longest 0% offer periods (minimum of two years) so you can maximize your chances of paying off debt during the interest-free time.

⦁ You want to improve your credit rating

Credit builder cards are a great way for people with limited credit to build up their credit score. You can use them as a way to try out credit or they work well for young adults to establish their first credit history.

Credit builder cards have a higher interest rate and credit limit, but if you use them in the right way, they can help you establish better credit to receive a standard credit card.

Credit cards can be used as a way to borrow money without paying interest.

The lender will register positive data about your history, which will help your credit rating.

⦁ Finding a Card that’s Cheap for Purchases

If you have a large purchase to make, consider using a credit card with 0% interest rates. These cards can help you pay off your big-ticket items without paying interest when used correctly. If this is what you are trying to do, look for a purchase credit card that has the longest period of 0% interest rates. According to Section 75 of the Consumer Credit Act, if anything goes wrong with the purchase using a credit card, there is equal liability between the provider and the retailer.

⦁ You want to clear the existing debt but continue to spend wisely

You might have card debts that you want to switch to a cheaper card or one with a 0% interest rate for transferred balances. However, this might not be possible if you need the card to keep using it. You should look for a balance transfer and purchase a credit card in this case.

To get the best deal when it comes to balancing transfer credit cards, you need to look for a card that offers 24 months interest-free for balance transfers and 18 months for purchases. Compare the details of each credit card depending on what you want.

⦁ The benefits of cashback or rewards

Rewards cards can give you several perks, such as cashback, in return for paying your credit card bills on time. You could use that cashback to set up a new account or purchase something.

⦁ A shopping credit card will offer you vouchers or in-store points when you spend at the shops.
⦁ An airline credit card can get you Airmiles and rewards.
⦁ A cash back credit card can give you extra savings

Rewards and cashback cards often come with a monthly or annual fee and may have high APR rates. To benefit from these rewards, you’ll need to repay the card in full before collecting another reward. Learn about our top-rated cards for cash-back by clicking here.

⦁ What to do if you need cash in an emergency

If you need a short-term loan, but don’t have cash on hand, a money transfer credit card may offer you an alternative. With this credit card, instead of transferring your credit card balance to the card, you can send money from the card to your bank account and use it as you see fit.

Certain credit cards offer low or even 0% interest rates that could be used to borrow money. Remember, when the offer period is over the interest rate will increase and should be paid off before then.

Searching and comparing credit card deals of all types is quick and simple with us. EarninghThrough has partnered with MoneySuperMarket so you can choose the best products offered by lenders. Click here to start today!