Get your finances into shape with a cheap card featuring low interest rates on purchases, cheap balance transfers and low annual fees.
The banks offer many credit card deals to attract customers in an increasingly competitive market. In reality there is no single cheapest credit card – what works out cheapest for you depends on how you use your card and your spending habits. Use our free and easy comparison service to find the cheapest deal for you, apply online today and start enjoying your new card’s cheaper interest rates without delay.
Lauren is not into credit card rewards. She doesn’t have the appetite to understand complicated frequent flyer programs. She values simplicity and playing it safe.
The main reason to get a card is for everyday convenience. If she ever carries a balance from one month to the next at least she won’t be paying much interest. Low interest rates equate to low risk and low stress. No surprises.
She easily finds a card on Credit Card Compare that gives her a low interest rate and the lowest possible annual fee too. She applies, gets approved and uses the card for day to day spending. Well played Lauren.
This entirely depends on how you use your credit card and manage your finances, so knowing what type of cardholder you are is important when selecting the cheapest deal.
If you always pay your monthly balance in full and don’t want a rewards scheme or other extras, one with no annual fee could be the best choice. You should also look for a card with an interest free period, giving you the most time to repay the monthly balance. No annual fee credit cards often have a higher interest rate, but if you always clear the monthly bill you can avoid paying both the interest and a yearly charge, keeping your credit card costs very low.
If you are likely to have an ongoing balance on your account, even occasionally, you should look for a credit card with a low purchase rate. Many credit cards offer an introductory low purchase rate, making it cheap to use them for the initial period, but you should check that the rate isn’t too high at the end of the promotion. Low interest rate credit cards sometimes attract a higher annual fee – make sure this isn’t so large that it negates the savings on the interest rate.
If you have a debt attracting interest on an existing credit card that you want to try to clear, a deal with the option for a low rate balance transfer could work out cheapest for you. With a balance transfer you move the debt to a new card from a different bank and pay at a lower rate of interest – often 0% – for an introductory period. The rate increases at the end of the promotion, and other fees and rates may be higher than on other cards, but used wisely balance transfers can be a good way of improving your finances and making it cheaper to own a credit card.
Once you have established what type of cardholder you are it makes it much easier to use the features of our website to study the features, rates, fees and special offers and find the cheapest deal.
Cheap credit cards tend to be quite basic with few extras, but it is still possible to find reasonably priced credit cards with a rewards scheme if this is an important feature for you. In fact, if you shop often with particular shops or companies and can find a program that fits in with your spending, a rewards scheme could actually save you money in the long run.
You need to be careful though – the cost of the rewards scheme is usually covered by an annual fee and higher interest rate, so you need to ensure any savings you are making are not wiped out by these extra costs.
Another type of reward worth considering is cash back, with which money is paid back into your account when you spend on your credit card. This can be a way to save money on your spending, making it cheaper to use your card, but again you need to watch out that the other fees and rates don’t negate the benefits.
Once you know which type of card you are looking for, it’s time to examine the features of each individual deal to find the cheapest one for you.
Purchase rate: This is the interest rate applied to the balance on your credit card account, so it’s very important when comparing deals, especially if you don’t always clear your monthly balance in full.
Annual fee: The annual charge pays for the maintenance of your credit card and any extras including rewards schemes and insurance policies. The annual fee should not out-weigh the savings you make on the card’s other features such as a low purchase rate. If you always pay your monthly balance in full, however, a card with no annual fee could be the cheapest choice for you.
Introductory offers: Many deals feature a special offer of low rate balance transfer, low purchase rate, or a combination of the two for a promotional period, making it much cheaper to use your credit card. If there is a special offer on the card you are considering applying for, make sure the other features don’t negate the savings you make, and be aware of how the deal changes when the promotion ends.
Once you have found the card you want, simply click the ‘Application’ button and start the simple and secure online application process. With many banks you should get a preliminary decision almost immediately, and if approved receive your new card in the post a few days later.