BetterBorrowing.co.uk - Credit Card Types

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Credit Card Types

Credit cards come in many different flavours and there are literally hundreds to choose from. Credit Cards are more popular in the UK than in any other european country. In fact credit card borrowing in the UK makes around 66% of all credit card debt in the whole of europe, so wonder the market is so flooded. Various companies provide cards , from the high street banks, building societies & internet banks. There are also specialist credit card companies who in addition to providing their own choice of cards also provide card services for a multitude of charity and sports organisations. Although we'll cover them in a different section, store cards can also be considered here as they are in effect a credit card that you can only use in specific retai outlets. Many of these cards are run by the same card service companies that provide the charity and sports club cards.

0% Balance Transfer Cards

With these cards the customer is offered a period of 0% interest on the balance they transfer onto the card when the arrangement starts. There is usually a limit to how much this can be and there are terms and conditions that dictate how interest will be charge after the 0% period ends or on any new spending made on the card. These cards can be attractive to people who have built up a large balance on a credit card and are being charged a high level of interest.

Low Standard Rate Cards

These credit cards offer a longer term lower level of interest on outstanding balances. There are usually no introductory perks or cashback incentives, just a straight forward low rate of interest that can be significantly lower than other credit cards.

Cashback Credit Cards

With these cards the incentive to the customer is some kind of reward based on the amount of money spent via the credit card. This can take the form of cash as a % of spend or it could be points as part of a loyalty or reward scheme.

0% Introductory Rate Cards

With these cards the offer is a limited period of no interest on new spend made via the credit card. This type of deal is useful if you are expecting to make a significant purchase via your credit card and know that you will not be able to pay it off immediately. If you already have a credit card that charges interest, however low and you are planning to make a large purchase then these deals could bring significant savings. One thing to watch out for is the interest rate that the card will revert to once the 0% period is over.

Lifetime Transfer Rate Cards

These credit cards differ to the 0% transfer rate cards in that the balance transferred onto the new card is fixed at a low level of interest for it's lifetime. New spend on the card will normally be charged at a higher rate and any payments made will normally be offset against the transferred debt rather any new spend. Obviously check the standard interst rate on new spend for competitiveness.