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DisclaimerAll credit cards are subject to the applicant’s status. The APR quoted is representative of the interest rate offered to most successful applicants. Depending on your personal circumstances the APR you are offered may be higher, or you may not be offered credit. Fees and rates subject to change without notice. Please check all rates and terms before borrowing.
Compare credit cards from different providers and see the offers you may be eligible for. This should only take a few minutes and won’t affect your credit score.
A credit card is a plastic card that allows you to buy goods and services using money you borrow, as opposed to a debit card that uses money that you already have in an account.
Credit cards are usually powered by Visa, MasterCard or American Express to process payments.
Because they don’t require any collateral, credit cards are a form of unsecured borrowing.
When you apply for a credit card, the provider will give you an agreed credit limit which is the maximum you can borrow on your card.
The credit limit could range from a few hundred pounds to several thousand pounds, depending on your credit history and income, for example.
You can use the card in any way you choose, such as to pay for a new car, a holiday, a new appliance, groceries and more. However, depending on the type of card you have (discussed below), there may be certain charges for different uses.
When you spend with a credit card, the provider pays the required amount to the retailer, and you then repay the provider the amount you borrowed.
Unless the card comes with an interest-free period, you will be charged interest on your balance.
Every month, you’ll need to make at least the minimum payment set by the credit card provider, but you can pay more than this to reduce the amount you owe and the interest you pay.
Because many card providers won’t charge any interest for up to 56 days, you can avoid paying any interest at all by paying off your credit card in full every month.
There are several different types of credit card available in the UK, and the right one for you will depend on what you want to use the card for.
As the name suggests, these credit cards are designed for spending and making purchases. There are interest-free credit cards available which offer 0% interest for a specified period. As long as you only use it for purchasing, make at least the minimum payments and pay off your card in full before the 0% period ends, these allow you to borrow without paying any interest at all.
These cards are designed to consolidate your existing credit card debt and cut the interest you pay. For a small percentage fee, you can move a balance from one credit card to a 0% balance transfer credit card that offers a specified interest-free period. This can help you save money on interest, providing you meet the terms of the card and clear your balance before the end of the 0% period.
Reward credit cards, such as cashback credit cards, allow you to make money or get extra benefits from your spending. For example, cashback credit cards pay you a percentage of the amount you spend while reward credit cards may offer vouchers and money off selected retailers. However, to maximise the benefits of these cards, you shouldn’t spend more than usual, and you should pay off your balance in full every month to avoid interest charges.
If used responsibly and managed correctly, credit builder cards (also known as credit repair cards) could help to build up your credit score. They may be useful for those with a poor credit score or a limited credit history, but it’s important to make your repayments and not build up expensive debt on the card.
These specialist cards are suitable for spending abroad. Standard credit cards may charge foreign transaction fees, whereas travel credit cards can charge lower, or no, fees.
If you want to move money from a credit card into your bank account (to pay off an overdraft, for example), a specialist money transfer credit card allows you to do this (for a fee). These cards may offer a limited interest-free period, but you have to clear your balance before interest charges apply.
Credit cards can be handy in many ways, but you need to be careful about how you manage them as they can be risky. You could describe them as a “double-edged sword”.
When deciding whether to get a credit card, you need to think about why you want it. Do you want it as back-up in case you face an emergency expense or to spread the cost of an upcoming large purchase? Or do you want a credit card to take advantage of the extra benefits it may bring, such as cashback, or to reduce the cost of your existing credit card debt?
All of these are valid reasons to take out a credit card, but you should only apply for one if you’re confident you can manage it responsibly.
If you think a credit card could tempt you to overspend or that you may struggle to make payments, applying for one is unlikely to be a good idea as you could end up accruing expensive debt.
Similarly, if you want a credit card because your finances are stretched and you need to borrow to cover your regular expenditure, you should seek debt help rather than applying for more credit.
See our guide to help you decide whether to get a credit card.
The best credit card for you depends on your requirements and what you want the credit card for.
There is a range of cards available and each individual provider charges different interest rates and offers different features, so it’s worth comparing the options that are available. Bear in mind that the cheapest credit card UK consumers can take out may not necessarily be the best card for you and your individual requirements, so don’t choose a card based on the interest rate alone.
Indeed, if you plan to pay off your credit card before any interest charges apply, you may be more interested in the extra features (such as a cashback or reward scheme) offered by a credit card instead of its interest rate.
You can see the variety of credit cards available by choosing one of the charts at the top of the page.
As with other forms of borrowing, the base rate can influence the interest rate that credit card providers charge. Some credit cards directly track the base rate, but other credit cards may have a less direct relationship, although there is likely to still be some correlation.
This means that, if the base rate falls, providers may lower the interest rate on their credit cards while any increases to the base rate may make borrowing on a credit card more expensive. Your credit card provider should contact you about any changes to the interest rate on your card.
Some of the key features to consider when choosing the best credit card for your requirements are:
These are just some of the points to consider when selecting a credit card, and some will be more important to you than others. A credit card comparison tool can help you to assess the features of each card to help you find the right one for your situation.
Most providers allow you to apply for a credit card online, but you may also be able to apply via mobile app, by phone or in-person at a branch if you prefer.
When you apply for a credit card, you’ll need to provide some personal details, including your
Using all the above information, credit card providers will decide whether to approve your application and, if so, under what terms.
The provider will also run a hard credit check as part of the application process, which will appear on your credit report. Because of this, it’s important that you don’t make multiple credit card applications within a short space of time (whether you’re successful or not) as lots of hard credit checks could negatively affect your credit score.
It’s a good idea to check your eligibility for a credit card before applying as this allows you to see which cards you may qualify for without affecting your credit score. You may also be able to see details such as the interest rate and credit limit you may receive on a card.
The APR, or annual percentage rate, tells you how much it will cost to borrow on a particular card. Bear in mind that, if approved for a card, you may receive a different APR than the representative APR advertised as only 51% of successful applicants need to receive this rate. The representative APR assumes you borrow £1,200 on day one and pay it back in monthly instalments over one year (without any further borrowing).
There’s no fixed credit score you need to qualify for a credit card as it will depend on the individual provider and your overall financial situation.
Your application for a credit card is more likely to be successful if you have a good credit history and your income and expenditure shows you can comfortably afford to make repayments. You may also be more likely to qualify for more competitive rates and access a higher credit limit.
Although having a poor credit history doesn’t necessarily mean you can’t get a credit card, you may face higher interest rates and a lower credit limit. As a result, it may be worth improving your credit score before applying for a credit card.
It may only take a few minutes to apply for a credit card and receive a decision from the card provider. However, it may take longer if the provider needs more time to review your application.
Once approved, it could take several working days to receive your PIN and credit card through the post.
Before applying for a credit card, see the offers you may be eligible for. This should only take a few minutes and won’t affect your credit score.
Unlike many other financial products, you can’t get a joint credit card. It’s possible to add additional cardholders to a credit card account, but only the main cardholder will be responsible for making the repayments.
Your credit limit (the maximum amount you can borrow on a credit card) will depend on factors such as your credit score, income, expenditure and other criteria. The provider will decide what credit limit to offer based on your application, with limits ranging from a few hundred pounds to several thousand pounds.
Those with a poor credit score or low income, for example, are likely to receive a lower credit limit than someone with a better score and a more secure financial situation. Once you have a credit card, the provider may give you the option to increase your credit limit if you prove you can manage your card effectively.
Applying for a credit card could temporarily harm your credit score as providers will run a hard credit check which will appear on your file. However, if you stay well within your credit limit, make all your payments on-time and don’t use the card for cash withdrawals, for example, a credit card could help to improve your score.
If you get close to your credit limit or miss payments, for example, your credit score is likely to go down.
Nothing should happen if you don’t use your credit card for a short period. However, if your card remains inactive for a long time, your card provider is likely to contact you to say they will close your account unless you start using your card again or request otherwise.
It’s unlikely to be a good idea to get a credit card if you’re not planning to use it. Despite your intentions, you could be tempted to spend and build up debt on your card if the option is there. If you don’t use a credit card, your provider is likely to contact you about closing your account.
While there’s no set limit on the number of credit cards you can have, the more credit cards you have, the more debt you could build up. Having too many credit cards could lead to you spending more than you can afford to repay and leave you struggling with expensive debt.
When you apply for a credit card, providers will be able to see existing credit accounts and the amount of debt you have. If they are concerned about the amount of credit you already have available, they may reject your application if they think you can’t afford another credit card. As a result, you should always think carefully before applying for a credit card and check your eligibility first.
It may be possible to get a credit card with no credit history, but there’s no guarantee. There are specialist credit builder cards that you may be eligible for and, as long as you manage them effectively, you could start to build up a credit history to help your chances of getting credit in the future.
If you don’t make the minimum payment on your credit card, the provider may charge a late payment fee. It may also report this to credit reference agencies, which means the late or missed payment would be recorded on your credit history and could affect your score. If you’re worried about missing payments, contact the provider as soon as possible and ask a debt charity for free debt advice if necessary.
Credit card debts remain after you die and will need to be paid from your estate. Alternatively, if you have payment protection insurance for the credit card, this will settle your outstanding debt (terms apply).
If your estate doesn’t cover your debts, they may be written off. Relatives won’t be held responsible for paying off any debts that were only in the name of the person who died. See more on what happens to your debts when you die.
Calculate what you need to know before applying.
Balance transfer calculator – calculate how much you could save by switching to a 0% balance transfer credit card.
Minimum repayment calculator – calculate how long it will take to clear your balance when only making the minimum repayments.
Repayment calculator – calculate how quickly you could pay off your credit card.
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