Best credit cards

What is a credit card?

A credit card is simply a way of borrowing money. Spend on one and the lender will cover the cost upfront, with you then repaying the money over a period of time.

In return for fronting the cash, the lender will charge you interest on any outstanding money on the card, and this is how it hopes to make a profit. However, if you clear the balance on the card IN FULL each month, you'll pay no interest and the borrowing will be free.

This guide will help you get the most out of a credit card, with key info and warnings, plus details of the different types and how to compare so you can find your top card.

Martin Lewis: How do credit cards work?

Using credit cards correctly can offer a range of benefits, such as reducing the interest you pay on existing debt, or spending which earns cashback or is interest-free. But used incorrectly, they can be damaging. Watch Martin Lewis explain how credit cards work.

Do your everyday spending on a credit card, and the lender will bill you each month for what you owe. If you repay this IN FULL each month – which you ABSOLUTELY should do – the borrowing will be at no cost. However, there are some key points to be aware of...

Always follow the credit card golden rules

• Repay IN FULL each month, or before the end of the 0% period if you have one.

• If you can't repay IN FULL, make the minimum monthly repayments or you'll be charged expensive fees and interest. You'll risk damaging your credit score if you don't.

• Don't use them to withdraw cash – you'll usually be charged expensive fees and interest.

• Credit cards have credit limits, so only spend up to that amount.

How do I apply for a credit card?

Applying for a credit card is a simple three-step process:

1. Find the best credit card for you. There is no single best credit card – your ideal one will depend on what you want to use it for. See how to find the right card for you.

2. Check your eligibility. You can use our Credit Card Eligibility Calculator to check your acceptance odds for most credit cards WITHOUT impacting your credit report.

3. Apply for the card. Once you've used our eligibility calculator to find your top card, you can use it to apply. You'll need to provide personal details (eg name, address, income). It only takes minutes and you'll get confirmation of approval within a day or two, possibly instantly. Your physical card should then arrive within five to 10 working days, though you can often access a digital card sooner.

See our full How to apply for a credit card guide for a more detailed explanation.

What is the best credit card?

Different credit cards serve different purposes – from spreading the cost of purchases and cutting your debt, to giving rewards and making it cheaper to spend overseas.

We detail the main reasons you may want to use a credit card in the table below, then point you towards the best credit card for that purpose – clicks the links to learn more about each one and to compare the different options.

Balance transfer credit cards – cut existing debt costs

• What they do: Reduce (or eliminate) the interest you pay on existing credit card debt.

• How they work: You get a new card that pays off old cards for you, so you owe it instead, but interest-free for a set period - so more of your repayments clear the actual debt.

• Key info: Go for the LOWEST FEE within a 0% time long enough to clear your debt. Longer cards have bigger one-off transfer fees, some shorter cards are fee-free. Unsure? Go long.

• Golden rules: Clear the card (or transfer again) before the 0% ends, or you'll pay expensive interest. Never miss the minimum monthly repayment. Never withdraw cash.

• Next steps: See 0% balance transfer credit cards, then use our eligibility calculator to speedily see your acceptance odds for top cards without affecting your creditworthiness. Struggling with debt? See our Debt help guide.

0% spending credit cards – interest-free borrowing

• What they do: Offer a number of months where no interest is charged on new purchases.

• How they work: Do all your spending on the card and just repay the minimum each month. Then repay the balance IN FULL before the 0% period ends. You'll pay no interest.

• Key info: Use them for planned purchases which you've budgeted to pay off within the 0% period. Always repay at least the monthly minimum and stick within your credit limit.

• Golden rules: Clear the card before the 0% ends or you'll pay expensive interest. Never miss the minimum monthly repayment. Never withdraw cash.

• Next steps: See 0% spending credit cards, then use our eligibility calculator to speedily see your acceptance odds for top cards without affecting your creditworthiness.

Reward credit cards – cashback & perks on spending

• What they do: Earn you cashback, points or vouchers for your everyday spending.

• How they work: Just do your normal spending on them and, in return, you get cashback or points which you can turn into vouchers. You could earn £100s in rewards.

• Key info: Choose a card that offers rewards that best suit you. ONLY using it for normal spending. Repay IN FULL each month and stick within your credit limit.

• Golden rules: Only use the card for all NORMAL spending. Set up a Direct Debit to repay IN FULL each month. Never miss the minimum monthly repayment. Never withdraw cash.

• Next steps: See reward credit cards, then use our eligibility calculator to speedily see your acceptance odds for top cards without affecting your creditworthiness.

Travel credit cards – fee-free overseas spending

• What they do: Give you near-perfect exchange rates worldwide with no fees for spending overseas. The best ones even allow you to avoid paying any interest.

• How they work: Most credit cards charge a 3% foreign transaction fee when used abroad. Travel cards waive this fee, so you get the same near-perfect rate the bank does.

• Key info: Always pay in the local currency, not pounds. Be careful withdrawing cash – some cards charge fees and interest. Never miss the minimum monthly repayment.

• Golden rules: Set up a Direct Debit to repay IN FULL each month. Never miss the minimum monthly repayment.

• Next steps: See travel credit cards, then use our eligibility calculator to speedily see your acceptance odds for top cards without affecting your creditworthiness.

Some of our top picks are debit cards, not credit cards. Credit cards give you powerful Section 75 protection, debit cards offer the lesser (but still useful) Chargeback protection.

Bad-credit credit cards – improve your credit score

• What they do: Help those with a poor (or limited) credit history access credit and build up a record of good borrowing, which strengthens creditworthiness.

• How they work: Bad-credit credit cards are specifically designed for those with poor credit histories, so they're easier to get. Just do your normal spending on them and repay IN FULL each month. After six months or so, your creditworthiness should improve.

• Key info: They usually offer lower credit limits, have higher interest rates and don't offer perks. So, it's absolutely crucial to use them correctly (see golden rules below).

• Golden rules: Set up a Direct Debit to FULLY repay each month, don't miss the minimum monthly repayment, don't withdraw cash and don't spend beyond your credit limit.

• Next steps: See credit cards for bad credit, then use our eligibility calculator to speedily see your acceptance odds for top cards without affecting your creditworthiness.

Are there any other types of credit card?

Yes, though they're a bit more niche. Here's a brief summary (links go to our detailed guides).

• All rounder cards offer 0% periods on both balance transfers & new purchases, but the 0% periods are typically much shorter compared to those offered by specific 0% balance transfer cards and 0% spending cards. Still, an all rounder card can be useful if you've existing debt and an upcoming, unavoidable purchase, and you only want one credit card.

• Airline cards earn you Avios or other airline points on your spending, which can be used for cheap flights and upgrades. Useful if you're a frequent flyer.

• 0% money transfer cards pay cash directly into your bank account in exchange for a fee. Then you've credit card debt which is interest-free for a set period. Useful if you need to clear an expensive overdraft, or as a way to secure a short-term interest-free cash loan (best for smaller borrowing, eg £3,000ish).

Is now a good time to get a 0% credit card?

Yes – particularly if you've got existing credit card debt to shift. While standard credit card interest rates remain high, competition between lenders has picked up after recent base-rate cuts by the Bank of England. That's led to the longest 0% debt-switch deals since 2018.

• 0% balance transfer cards currently offer up to 38 months interest-free.

• 0% purchase cards currently offer up to 26 months interest-free.

What to consider when getting a credit card

Always think about the advantages and potential drawbacks of getting a new credit card.

Credit card benefits

• Cheap borrowing. Manage your card well and pay it off IN FULL each month, and you'll pay no interest – there's no cheaper borrowing.

• Section 75 protection. Spend on a credit card and you automatically get this protection, covering purchases between £100 and £30,000. If things go wrong, the lender is liable alongside the retailer.

• Rewards on spending. Many credit cards offer perks such as cashback or points, so you can be rewarded for just doing your normal spending.

• Credit score boost. Using a credit card responsibly can help to build your credit score.

Credit card drawbacks

• High interest rates. Fail to pay the balance off IN FULL each month and you'll pay expensive interest.

• Beware the minimum repayment spiral. Avoid paying just the minimum repayment as, again, that will cause interest to pile up fast. Instead, always repay IN FULL.

• Beware high credit limits. Be disciplined and only use your credit card for everyday spending, and budget well to pay off your balance by the end of the 0% period (if you have one).

• Annual fees. Some cards charge annual fees that could outweigh their benefits.

• Credit score damage. If you manage your debt badly, you could negatively impact your creditworthiness, making it more difficult to access future credit.

Credit card FAQs