Credit card comparison
Credit card comparison that doesn’t affect your credit score
Our friends at Go.Compare are ready to help you compare lenders and credit card types to find one that works for you.
How does a credit card work?
A credit card is a way of borrowing money. The card will have a credit limit, which is the maximum amount you can spend.
You either pay back all the money you’ve borrowed in full each month, or in monthly instalments until the full cost is paid – the card provider will determine the minimum amount it expects you to pay each month.
Credit cards have an interest rate that is based on your provider’s own criteria and what you can afford.
Some cards have an introductory rate, which means you pay less or no interest for the first few months. You must meet the minimum monthly repayments and watch out for other fees though.
There are different types of credit card, including balance transfer, purchase and reward cards.
What can I use a credit card for?
Here are five things credit cards could be sensibly used for:
Big purchases
A purchase credit card could help you spread the cost of pricey items or events.
Consolidating debt
Combining debt with a balance transfer card can make it easier to manage.
Earning cashback
Reward cards allow you to earn cashback or loyalty points.
Consumer protection
Your card provider can refund you if what you bought isn’t as expected.
Building your credit score
Using your credit card for necessities (and paying the balance on time) shows providers you’re a responsible borrower.
Whether you need a credit card depends on your circumstances.
Remember that whatever you borrow will need to be paid back, possibly with interest on top.
Credit card types
Here are a few different types of credit cards:
Purchase cards
You can use these cards to buy items or services. Some will have a 0% interest introductory period during the first few months, to help you spread the cost of a pricey purchase.
You’ll still need to make the minimum monthly repayments and pay off the full balance before the introductory period ends to take full advantage of low or no interest.
Balance transfer cards
You can transfer what you owe on other cards to a balance transfer card, so your credit card debt is all in one place and easier to manage.
Some balance transfer cards also have an introductory period where you pay low or no interest for the first couple of months, as long as you make the minimum monthly repayments.
Reward cards
Reward cards can either give you back some cash every time you use them, loyalty points which can be used to buy certain things (like groceries or flights), or both.
Make sure to check that the interest you’d be expected to pay doesn’t outweigh any benefits.
How to compare credit cards
A credit card can be useful, but it’s important to find the right one for what you need. To compare credit cards without affecting your credit score, you’ll need to provide some info about:
About you
Your name, date of birth and email.
About your home
If you’re a homeowner and how long you’ve lived there.
Your financial situation
What you do for a living and your annual income.
Pros and cons of credit cards
Used sensibly, credit cards can be handy – but there are some downsides as well.
Pros of credit cards
Improve your credit score: using a credit card and paying it off on time shows that you’re a responsible borrower which increases your credit rating
Extra protection: you’re protected under Section 75 of the Consumer Credit Act plus it’s easy to cancel your card if it’s stolen.
Card perks: as well as extra financial protection, some cards give you rewards and cashback.
Cons of credit cards
You must pay in full on time: if you don’t you’ll have to pay interest, which could end up costing a lot.
Extra fees: if you haven’t paid the full amount on time, there are also default fees to pay and it will negatively affect your credit score.
Expensive cash withdrawals: a fee is usually charged and interest starts building up straight away.
5 ways to make the most of your credit card
Pay on time
That way you won’t be charged interest (or any late repayment fees).
Make sure the card suits your needs
Consider what you’ll use the credit card for so you can get one that suits your needs.
Pay off debt first
Interest rates will always be higher for debt than savings, so pay off what you owe as soon as possible.
Combine any existing debt
Use a balance transfer card with a lower interest rate or an interest-free period to combine your debt and pay it off.
Cancel old cards
This makes managing money easier and might even improve your credit score.
Got a question?
Check out our frequently asked ones
Speak to your credit card provider first – they won’t want you to default and will try to help you.
You can also get in touch with Citizens Advice, National Debtline, Money Advice Service or StepChange Debt Charity for free advice.
APR means ‘annual percentage rate’. It’s how much interest and other fees you’ll be expected to pay.
So the interest rate for a card might be 15%, but the APR could be 18% because it includes fees as well as the interest.
A lower APR doesn’t always mean a better deal as there may be other fees – like early payment or balance transfer charges – that the APR doesn’t take into account.
What’s right for you depends on your needs. Look at the different types of credit cards and see which, if any, fits your requirements.
Making too many credit applications, having too much existing debt or a low credit score could see your application rejected. Providers might also refuse you if they don’t think you’ll be able to make the repayments or if you already have late payment charges on your record.
Paying the balance off quicker means you’ll be charged less interest (and you’ll have less debt hanging over your head).
No, but you can sometimes add additional cardholders to your account. They aren’t liable for paying off any debt on the card though, that’s still your responsibility.
The three main credit reference agencies – Experian, Equifax (ClearScore) and TransUnion (Credit Karma) – have a free online service for you to view your score. It’s worth remembering that each will have their own scoring system.
If you’re after a more detailed credit report, you’ll usually be able to sign up for a subscription service.
You can: A few tips to improve your credit score are:
- Pay off your bills and debt on time
- Make sure your credit report is correct (check your address is right, for example)
- Close any accounts you don’t use
- Using a credit card responsibly can also help.
No. What your interest rate is depends on your credit score and the provider’s criteria. If you have a great credit score, you’ll likely be offered better rates.
You might get a better deal if you have an established relationship with your bank, but it’s worth comparing other options as there’s no guarantee.