Credit cards can be great tools, but it's important to have the right one for your needs.
Even if you already have what you feel is a decent card, you should check there isn't an even better option out there.
Here's our handy guide to the top cards around right now.
If you want a 0% balance transfer
If you already have some debts on a credit card you want to pay off, the period after Christmas is a good one as lots of new cards are launched.
This year is no exception: Barclaycard has just launched a card with no interest to pay for two and a half years – the Platinum 30-Month. In common with other 0% balance transfer cards, you'll have to pay a balance transfer fee, which is a percentage of the amount you want to transfer. The Barclaycard 30-Month card's fee is 2.89%. So if you have £2,000-worth of debt to transfer, it will cost you £57.80.
If you don't need two and a half years to pay off your debts, you could pay a far smaller balance transfer fee. For example, the Lloyds Bank Platinum 24-Month, Bank of Scotland Platinum 24-Month and TSB Platinum 24-Month all offer two years with no interest to pay and a balance transfer fee of just 1.5%.
If you want to spread the cost of a purchase
If you have a big purchase coming up and you want to pay for it gradually, you could use a 0% for purchases card. Santander is leading the pack here, with its Purchase credit card offering 18 months with no interest to pay. Halifax's 17-month card is in second place. Just remember to make at least the minimum payment each month, or your 0% offer could be withdrawn. Ideally, as with any 0% card, you will pay off your balance in full by the time the interest-free period ends.
If your credit rating isn't great, you could enjoy three months at 0% with the Barclaycard Initial Visa. But this isn't long at all and the interest rate is high, so it's best not to spend too much if you can't afford to repay it swiftly.
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If you want to earn cashback
Paying for your everyday spending using a cashback credit card and then paying off the balance in full each month is an easy way to earn some extra money. Right now, the American Express Platinum Cashback card is offering the top rate for new customers. You can earn 5% on spending in the first three months, up to a maximum of £125, then 1.25% on the rest of your spending.
This card comes with a £25 annual fee, but if you apply before 10th March you get a bonus £25 cashback, effectively wiping the fee out. However, you will need to pay your second year's fee to get your cashback. There's a fee-free alternative - the American Express Platinum Everyday card.
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If you want to earn rewards
Depending on where you shop and what you like to do in your free time, you could be better off opting for a reward credit card. If you're a Tesco shopper, there's the Clubcard credit card. If you spend at Sainsbury's, there's the Sainsbury's Bank Nectar card, or the American Express Nectar card, which has a 20,000-point bonus if you spend £2,000 on the card in the first three months. It does have a £20 annual fee too though.
If you like travelling, the American Express Preferred Rewards charge card offers a very enticing introductory bonus. Spend £2,000 in the first three months and you'll earn 20,000 Membership Rewards points – enough for two return flights from the UK to Europe, although taxes and fees cost extra. You also get two free airport lounge passes.
However, this is a charge card, not a credit card, so you have to pay off the balance in full each month. There's also a £125 annual fee after the first year.
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If you want to rebuild your credit rating
If your credit rating isn't in great shape and you don't qualify for market-leading credit cards, the first thing to do is have a read of Ten simple steps to improve your credit record.
Then take a look at the aqua Advance card. This is a card specifically designed for people wanting to rebuild their credit rating. The representative APR starts at 34.9%, but if you repay your balance in full on time, which you must or you'll be charged interest, over time it could fall to 19.9%. This card also has no foreign usage fees, so it's good to take on your holidays.
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If you want a card to use abroad
If you're a frequent traveller, then you want a credit card that doesn't charge foreign usage or commission fees. Take your pick from the Post Office Platinum or Halifax Clarity cards.
If you like to earn travel rewards, the Lloyds Bank Avios Rewards credit cards (you get an American Express and a MasterCard) could be worth a look. You can earn Avios on your spending, which you can redeem on travel and holidays, and the cards are also commission free to use abroad. This package does have a £24 annual fee though.
If your credit rating isn't great, you could still be accepted for the aqua Advance card.
With all of these cards make sure you pay off your balance in full each month to avoid interest charges.
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If you only want to carry one card
We're big fans of the Nationwide Select card, which offers free foreign usage, now pays 2% cashback on all sterling purchases for 90 days from account opening before reverting to 0.5%, and offers rewards via the Nationwide Simply Rewards scheme.
The catch is you need to be a Nationwide current account customer to qualify. But with the FlexDirect account paying 5% interest on balances of up to £2,500 for a year, it could be worth your while switching.
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