Finding the Best Credit Card

Written by Karen Bryan

debitcredticards1 Finding the Best Credit CardI received an annual statement from Barclaycard, which gave details of the cashback I’d earned by using their credit card.  This prompted me to work out the total cashback I’ve received from my three credit cards over the last 12 months.

  • Halifax Clarity Card                   £50
  • Aqua Reward Card                     £92
  • Barclaycard (formerly Egg)      £34
  • Total annual credit cashback   £176

I wish I could have just one cashback credit card, but I need to have three to maximise my cashback payout. The Halifax Clarity give you £5 cashback once you’ve spent £300 a month, so there’s no benefit to spending more than that. The Aqua Reward Card’s cashback is capped at £100 a year, equating to an annual spend of £3,333. I use the Barclaycard, which offers a flat rate 1% cashback, for any spending above the Halifax Clarity and Aqua Reward Card limits. You can find out more in my cashback credit card article and podcast.

The level of cashback is one of the most important features of a credit card to me. This is because I pay off the full balance every month, so pay no interest on the balance.

How do you find the best credit card for your usage?  A good way to start is to look at credit cards featured on a comparison site.  It’s really worthwhile doing some research on the best credit card for you, by evaluating all the features of each card.

Althought the 6% cashback on offer on some spending with a Barclaycard Cashback Card sounds tempting, there are annoying spending tiers and thresholds.  A Sainsburys card offers 5% cashback on your Sainbury shopping for the first three months. I reckon that you could save more than 5% by doing your shopping at a cheaper supermarket such as Aldi or Lidl.

Although the American Express card can offer a high rate of cashback, especially for the first three months, I found that I couldn’t use the cards everywhere and that some retailers charged a higher credit card payment surcharge on American Express cards than for payment by other credit cards.

Watch out for annual fees. I’m not keen on them, as they eat into my cashback profit. I was considering getting the Santander 123 Credit Card, until I discovered that it had a £24 annual fee.

If you have an outstanding balance on your card, then you should be looking for the lowest possible rate of interest. You may even be able to transfer your existing balance to a new credit card; some offer 0% on balance transfers for up to 24 months. However, do compare the length of the 0% interest period, the rate of interest on any new spending and the balance transfer fee (often around 3% of the balance).

For some credit cards, you need to have a minimum annual income.

Finding the best credit card can save you serious money, especially if you have a high outstanding balance on your card(s).

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