Please
note: The interest rates, APR calculations, charges,
awards and other conditions applying to credit cards on these
pages may be changed by the card providers at any time.
Types of UK Credit Cards Online
Balance transfers, initial
free period, cashback rewards . . . what's it all
mean?
Set out below you'll find the broad
types of credit card accounts offered by
the major UK credit card providers.
With the exception of proprietary
cards like American Express™ and Diners Club™
UK credit cards are all variants on the products offered
by Visa™ and MasterCard™,
so we haven't gone into the differences between charge cards,
debit cards and credit cards, as most people want a
plain and simple credit card, and a bit of common
sense about what all the jargon means.
If you need more information, and
a selection of our picks for the best providers of each
type, click on the "Card types" button in the
top left corner of each section. If you think you've got
enough information here to make a decision, click on the
"Compare and Apply" button.
0% balance transfer
0% balance transfer simply means
the card issuer is prepared to pay a premium to shift business
from a competitor to the issuer's own card. So, when you apply,
you can transfer the balance of the card accounts to your
new card and enjoy a removal of the interest payable on those
amounts, while paying the normal interest on new transactions
(unless of course a free initial period applies — see
below).
Interest Free/Low Interest
Interest free initial periods, free
interest on certain transactions, or a special low interest
rate for certain conditions are all ways in which the card
issuers try to gain that little edge on the competition.
The effect of these offers is to set
off an interest reduction against APR ( Annual Percentage
Rate), thus providing the issuers with a marketing tool,
and the cards holder with some advantages, instead of simply
offering a lower rate of interest on the face of it.
Student Cards
Student cards vary from a simple credit
card loaded with the sort of benefits the issuers think
will attract new young customers to their bank, to debit
cards that are designed for the careful parent to supply
their offspring's account with an allowance while at University.
Most credit card issuers are banks,
and they not only want your credit card account, they in
fact want your bank account, and a credit card is a good
way to win a new bank account customer.
With a little care, intelligent use
and punctual repayment a special Student Card from one of
the major issuers can help you through tertiary education.
Cashback
There's a mass of cashback variants.
And no, you don't get cash back in your hand, for the most
part. What you do get is a reduction on the amount of a
cash transaction (buying petrol, lunch in a pub, that sort
of thing), of an agreed amount, as to what is charged to
your card.
There are cards that offer "cashback"
on airline tickets, cinema tickets, DVD purchases, practically
anything.
Check the APR, and figure it out for
yourself. Some are good, some not so good. Our "More
Information" page has our picks of the best cashback
offers.
No Annual Fee
This is almost automatic with most
bank issued cards, as they reckon, (rightly) that they will
pick up the business on a bank account coupled to the card.
As with all things credit card, it's
a bit of a balancing act, as the issuer can set off apparent
discounts, benefits and rewards on the card against other
charges.
However, no annual fee does lower
the APR (Annual Percentage Rate, and if you couple that
with a 0% balance transfer, and given that the major issuers
are slashing interest to win share, this becomes a good
source of cheap short term money, but remember, credit cards
are a very expensive way to borrow long term.
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