Credit Card Deals & Offers

Credit Card Offers UK: From Interest Free Rates to Fee-Free Use

If you’re going to find the very best credit card for your circumstances, you need to know how credit cards work.

Most people understand the basics: credit cards allow you to borrow money up to a pre-set limit. As long as you repay the minimum amount each month, you can pay the debt back whenever you want with no set monthly payments or deadlines. In short, credit cards are a flexible way to borrow.

It might sound simple but there’s loads of other stuff you need to get your head around too: 0% deals, balance transfers, cashback etc.

The Top Credit Card UK Providers

• American Express

• Barclaycard

• Bank of Scotland

• Capital One

• Halifax

• HSBC

• Lloyds Bank

• M&S

• MasterCard

What Makes a Hot Credit Card Deal?

A bog-standard credit card normally offers a purchase interest rate of about 18 or 19%. Your typical mainstream card is unlikely to ever be a hot deal.

But there are several niches in the credit card market where competition between providers is intense meaning that there are great deals to be found. They might include:

• Interest-free (0%) introductory dealson balance transfers or purchases, maybe both. Credit cards compete with one another by offering longer and longer 0% deals. You’ll quite often see a hot deal at, say, 30 months, being taken over by a new deal offering 31 or 32 months.

• Balance transfer (BT) fees. You normally pay a fee to transfer a balance to a new card offering a 0% rate. This is usually a percentage of the amount transferred. A low BT fee, or no fee at all, can make a deal hot.

• Freebies, points or perks. Some cards offer freebies you might normally pay for – travel insurance, for example. Others offer cashback, or reward or loyalty points.

• Fee-free use abroad. Most cards charge extra fees if you use them overseas. Those that don’t are obviously better.

Start Anything You Want Today with Barclaycard

Balance Transfer Credit Cards

A balance transfer allows you to transfer a debt owed on one credit card to another credit card with a lower interest rate, usually 0%, for a certain period of time.

A card with a 0% introductory offer on balance transfers is known as a 0% balance transfer card.

0% balance transfer cards are good for people who are paying high amounts of interest on existing credit card debts and want to reduce the rate to zero.

There are three golden rules to using balance transfer cards:

1. Don’t spend on the card as you’ll still be charged interest on purchases in most cases. A small number of cards offer 0% interest on both balance transfers and purchases.

2. Aim to pay off the whole debt within the interest-free period. You’ll need to make at least the minimum payment (shown on your statement) each month to avoid the 0% deal being cancelled.

3. Factor the balance transfer fee into your calculations – is the switch still worth it?

More important things to know about balance transfer cards:

• You’ll need a decent credit rating to be accepted for a 0% balance transfer card.

• There’s no guarantee your new provider will offer you the same amount of credit as your previous credit card provider.

Purchase Credit Cards

A card with a 0% introductory offer on purchases is known as a 0% purchase card. This means you won’t pay interest on your purchases for a certain period of time. This can be anything from a couple of months to two or three years. After that interest will be charged at the card’s APR.

There are three golden rules of 0% purchase cards:

1. Don’t transfer an existing balance to the card as you’ll still be charged interest on balance transfers in most cases. A small number of cards offer 0% interest on both purchases and balance transfers.

2. Pay off any spending on the card during the 0% period ends, before interest kicks in.

3. Make sure you pay at least the minimum payment each month. This will be shown on your statement. Missing a minimum payment can mean any 0% introductory deal is cancelled – and interest will kick in.

Money Transfer Credit Cards

Balance transfer cards only allow you to switch existing credit card debts to the new card. But ‘money transfer’ cards allow you to switch other debts – such as overdrafts and loans – to a new card, normally at 0% interest.

But, as with balance transfer cards, there’s likely to be a fee involved (the ‘money transfer’ or MT fee) so you need to take this into account.

WARNING: If you transfer your overdraft to a money transfer card, don’t be tempted to run up your overdraft again. That’s just silly.

The Typical APR

APR stands for Annual Percentage Rate and is basically a charge for borrowing money. It is expressed as a percentage of the total amount borrowed and takes into account both the interest rate on the card and any annual fee or other charges. If there isn’t an annual fee, the APR basically represents the interest rate you’ll be charged.

When credit card providers advertise a ‘typical APR’, they’re obliged to give this rate to at least half of successful applicants. This means you might apply for a card with a certain APR, but be offered a different APR. The same goes for 0% periods – you might be offered a shorter 0% period than the one on the adverts.

When it comes to credit cards with 0% introductory rates, APRs typically kick in at the end of the 0% period. You could either pay this rate or switch your credit card again.

Credit Cards and Your Credit History

In general, the better your credit rating, the better credit card rate you’ll be offered. You can check your credit report with Experian, Equifax or CallCredit.

Don’t apply for lots of credit cards in a short space of time as this will make you look desperate, or possibly fraudulent, and damage your credit rating.

In some cases, people with poor credit records can use ‘credit building’ credit cards to improve their credit score. These cards typically come with a high interest rate of up to 50%. The golden rule of credit building cards is to borrow regularly on the card and pay your balance in full each month – that way you won’t pay any interest, and you’ll improve your credit score.

What’s Your Credit Limit?

Your credit limit is the maximum amount you can owe on your card at any one time. If you try and spend on your card beyond your limit, the purchase may be declined or you could be charged extra.

Your credit limit will be set when you apply for your card and will depend on:

• your credit history

• your income

• the credit card you’re applying for

WARNING: If you exceed your credit limit you may have to wave goodbye to any 0% introductory offer – to get 0% you need to stick to the rules.

Cash Withdrawals

You can use your credit card to withdraw cash from an ATM – but it will be expensive. Most cards charge a higher interest rate on cash withdrawals than they do on anything else.

Most credit cards offer 50 to 60 interest-free days on purchases. As long as you pay your balance in full before the end of this period, you won’t be charged interest on your purchases.

But interest-free days generally don’t apply to cash withdrawals – you’ll be charged interest from the day you withdraw the cash. For this reason, you should only withdraw cash on your credit card in an emergency and aim to repay it in full as soon as possible.

Cashback and Rewards

Cashback credit cards are specialist cards which offer a proportion of the money spent on the card back in cash. For example, if you spent £200 on a card with a 1% cashback, you would receive £2 back.

Reward credit cards offer you loyalty points when you spend on the card. For example, Tesco Clubcard points or Avios.

Cashback and rewards cards are usually only suitable for people who repay their balance in full each month. Otherwise the interest you pay is likely to dwarf any cashback you receive.

Foreign Exchange Fees

One big issue with credit cards is that most providers charge extra fees when you use them abroad.

These include:

• foreign loading fees

• purchase or transaction fees

• fees for using ATMs

These fees can add 4 to 5% to any transaction you make overseas and bump up the cost of your holiday.

Any credit card that doesn’t charge extra to use abroad is likely to be voted hot – and quite rightly so.

Paying by Credit Card

Most new credit cards support contactless technology. This feature lets people pay for items, typically less than £30, by simply holding your card near a contactless reader.

For more expensive purchases you’ll need to enter a four-digit personal identification number (PIN).

You can also use your credit card to pay for things online or over the phone. The retailer will require the long card number on the front of your card, the expiry date and the three-digit CVV number on the back of your card.

Another way to pay by credit card is to add it to mobile payment apps such as Apple Pay or Android Pay. You can also link your card to a PayPal account.

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