What's The Best Credit Card For Me?

Choosing the best credit card is a lot less complex than it appears. All it takes is a clear understanding of how credit cards work and how they fit into your lifestyle. While there appear to be dozens of different credit card types on the market, there really are only a few with many variations. If you take the time to sort out your own priorities and study how the different types of cards work, you'll find it easy to choose the best credit card UK finance companies offer. Here we go with a quick primer on UK credit cards and how to use them.

Basic Low APR Credit Card
This is the standard credit card UK consumers want. You make a contract with the issuing company that they will pay the merchant when you present your card at the till, and you will repay them on a monthly basis. In return for that consideration, you agree to pay 'interest' - a percentage of the amount that you borrow in addition to the repayment. In most cases, if you repay the charges in the same month, you'll owe no interest. If you choose to spread the payments out over several months, you'll pay interest charges for each month on your unpaid balance. The lower the APR (annualized percentage rate) on your credit card, the less you'll pay in interest charges.

Bottom Line: This is your card for long-term purchases that you can't pay off in just one month.
Cautions: Late payments and other penalties can be a serious trap on these cards. In addition to the fees, you may find that your low interest rate gets increased substantially.

Rewards Credit Card or Cash Back Credit Card
Both rewards and cash back credit cards offer an incentive to get you to use their plastic. In both cases, the credit card company will pay points or 'cash' into a running account equal to a percentage of your spends. In most cases, the interest rates on these cards will be higher than on cards that don't offer reward points. There are various schemes for redeeming your rewards - in some cases, you'll be able to trade reward points for merchandise at certain shops. In others, the company will post a cheque to you when your rewards reach a certain amount, or once a year.

Bottom Line: This is your credit card for purchases that you expect to pay off within the first payment period. The cash back or rewards points amount to a discount of .5% to 1% on all of your purchases, though some cards may only allow you to spend your points at particular merchants.
Cautions: Since you're being charged a higher interest rate, be careful to pay off your account every month to avoid paying high interest charges.

Affinity and Charity Credit Cards
Many charities and organizations now offer their own credit card. You can flash the colors of your favorite football club, wave your allegiance to the Audubon Society or a children's charity or pay homage to your local church or charity. Whenever you apply for an affinity or charity credit card, the organization will get a royalty, and they'll get further royalties on every purchase that you make. The benefits of an affinity credit card is that you're making painless contributions to your favorite charity or organization. The drawback is that they seldom carry the low interest rates you can get from a standard credit card.

Bottom Line: Choose an affinity credit card for the good you can do for an organization you fancy. Some - particularly football club cards - offer special benefits to cardholders.
Cautions: You'll be paying higher interest charges, so use one of these as you would a rewards credit card. Avoid long term purchases on them.
If you're looking for a new credit card of any type, you'll find all the information that you need at http://www.airaid.co.uk, your best source for up to date information on credit cards in the UK.