Credit is an important part of being financially literate, and learning how to manage and use credit cards to the best of their potential is crucial. There are a number of steps you can take to get yourself out of debt, and these include:
Another important priority is building credit - and choosing the right credit card can be key to this. To help, we have put together a range of the best options based on factors such as credit limit and suitability: without further ado, let’s review some of the UK’s leading credit cards…
- Our Top Pick of Best Credit Cards
- 1. 💳 M&S Bank Shopping Plus Credit Card
- 2. 💳 Santander Everyday No Balance Transfer Fee Credit Card
- 3. 💳 AMEX Preferred Rewards Gold
- 4. 💳 Barclaycard Rewards Visa Credit Card
- 5. 💳 MBNA Money Transfer Credit Card
- 6. 💳 Tesco Bank Foundation Credit Card
- 7. 💳 Lloyds Bank Premium Low Rate Credit Card
- 8. 💳 Sainsbury’s Bank 17-Month Low Balance Transfer Credit Card
- 9. 💳 HSBC Student Credit Card
- 10. 💳 British Airways American Express Credit Card
- Best Credit Cards – Buying Guide
- FAQs
Our Top Pick of Best Credit Cards (UK) 🇬🇧
Considering a credit card? When crunching your Money Data, take time to know your circumstances and use good financial common sense.
1. M&S Bank Shopping Plus Credit Card – Popular Credit Cards Service
If you are a regular shopper of M&S, the M&S Bank Card is a perfect choice. The card itself is issued by the M&S Bank and is only available to customers in the UK, and their name and logo appear on the card.
Range of Perks
You can use this card at any store that accepts MasterCard, and the card offers a number of benefits and perks that make it a great choice for anyone who shops at M&S or who uses credit cards at all.
These include no fees for the first year, a 0% purchase interest rate for the first 6 months on any purchases you make, and no annual fee the first year. After the first year, the card charges an annual fee of £49 ($65).
How to Apply for the M&S Bank Card
Applying for a card with M&S Bank is relatively straightforward; simply head to the website and indicate that you shop at M&S. This will make you eligible for a credit card account with them.
Once you’ve completed the application, the company will look over your application and decide whether you’re eligible for an account. If you don’t end up getting approved, you can try again until you are – but be aware that any applications will be recorded on your credit file, which could cause your score to go down.
Benefits
The M&S Bank Card gives cardholders two main benefits. The first is a 0% purchase interest rate. This means you can make purchases with this card and pay nothing. The card’s zero percent interest rate is only valid for the first six months after you open the account. After that, it rises to 18.75% p.a. with a £49 ($65) per year fee.
The second benefit is the card’s fee waiver for the first year. This means that you don’t have to pay any fees for your first year of card use, allowing you to make purchases without having to worry about paying extra.
Who Should Sign Up for an M&S Bank Credit Card?
If you have made the decision to go into debt, the M&S Bank Card is an interesting choice for anyone who shops at M&S and who also uses credit cards.
Given the card’s 0% purchase interest rate and fee waiver for the first year, it’s a possible way to build a credit history (in the sense of debt) without being penalised by higher interest rates. Reportedly, you may need a credit score of 786 to be approved, although some sources say it is also an option for people with a bad credit score.
The low interest rate could possibly also help you pay off the balance quickly and get your credit card back to positive before long.
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2. Santander Everyday No Balance Transfer Fee Credit Card – Popular Credit Cards Choice
With a balance transfer card, you can use your existing credit to pay down another credit card balance. Doing this will essentially “transfer” the debt from one card to another.
Santander Balance Transfer
Santander bank offers two different credit card options in their Sailing and SEND portfolio: the Santander Everyday Card, and the Santander Everyday with No Balance Transfer Fee Card.
Both offer a 0% intro APR on Purchases and Balance Transfers for 12 months, after which the ongoing APR will vary based on your creditworthiness.
The Everyday with No Balance Transfer Fee Card is a no-fee balance transfer card that also gives you a 0% intro APR on both new purchases and balance transfers for 15 months.
After this period is up, you will be charged the ongoing APR for your creditworthiness. For example, if you currently have a £3,000 debt with a 19.99% APR, you would pay £314.10 per month until the debt is paid off. After 15 months, you will be charged the 19.99% APR on the remaining amount.
Note
When you use a balance transfer card to move your debt, the creditor usually agrees to let you pay the amount owed by another account. Because the creditor has agreed to let you use their account as collateral, the amount you owe on this new account will be reported to the credit bureaus as “new debt”.
Because this new debt is reported to the credit bureaus, your credit score will show a “hard” inquiry on it. Credit scores evaluate the amount of “hard” inquiries on your report heavily and will generally impact your ability to get a loan or a mortgage.
The amount you owe may still be calculated as “old debt” on your report, but it will be reported as “new debt” and counted as a “hard” inquiry. The amount you owe on this new account will affect your credit score more than the amount you owe on your original account.
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3. AMEX Preferred Rewards Gold – Top Credit Cards Option for Rewards
The AMEX Preferred Rewards Gold Card is a prepaid card that is part of the “Preferred Rewards” program.
This card itself is meant to help cardmembers earn points that can be redeemed for cash back at select merchants - and this ca make it a lucrative option.
Fairly Low Credit Limit, But No Fees
Though it’s limited to a £40 monthly credit that can be used for purchases that fall under the category of groceries, petrol, and utilities, there are no annual fees associated with this card, and it’s accepted almost anywhere credit cards are accepted including petrol stations, grocery stores, restaurants, and department stores.
Benefits
The most important benefit of the AMEX Preferred Rewards Gold Card is the ability to earn and redeem rewards. With this card, you can earn 10% cash back on your first £1,000 every year.
You can also earn 1% cash back on all other purchases and get an additional £150 in point bonuses if you sign up for the card when it first launches. If you keep this card for at least one year, you can redeem those rewards for that lump sum.
Great Interest Free Welcome Period
The card also has an introductory period of zero percent interest for the first 12 months, and there is no annual fee for the first year. This can be a good card for those who need a way to make small purchases with their debit or credit card to earn some rewards.
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4. Barclaycard Rewards Visa Credit Card – Reputable Credit Cards Supplier
This is a Visa card that lets you earn points that can be redeemed for travel and gift cards. The card is perfect for frequent travellers who want a card that is super simple to use.
Very Simple to Use
You don’t have to deal with any complicated terms and conditions. There is no annual fee and no required minimum spending. There is also no balance transfer fee which makes it one of the best cards available for those with bad credit. Keep in mind that the card doesn’t offer certain security features such as fraud protection or card theft prevention. That means you are solely responsible for protecting your card and its information.
How to Apply
The application process for the Barclaycard Rewards card doesn’t require any documents or proof of your identity. You can either apply online or over the phone. Once you apply, you have to wait up to 72 hours for the application to be processed – this is quite a lengthy period compared to other cards.
You can also apply for the card online. Then, you log into your account and click on the “Rewards” tab. You will see a list of cards that you can apply for. Click on the “Apply” button and you will be directed to a form that you have to fill out.
You will have to answer a few basic questions like your name, address, and occupation. Then, you’ll be asked to enter your credit score. After you enter your information, the card will show up as “Pending” on your account.
Wide Range of Benefits
The Barclaycard Rewards card comes with a number of advantages, and these include:
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Earn points – You are eligible to earn points when you make purchases using the Barclaycard Rewards card. You can redeem your points for gift cards, travel tickets, and cash back.
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No Annual Fee – There is no annual fee and no required minimum spending to get approved. This makes it a great credit card for people who don’t have a lot of money and are looking to get a card that won’t cost them anything.
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No Balance Transfer Fee – There is no balance transfer fee when you make your first purchase. This is perfect for people who have bad credit because it means you don’t have to pay any money upfront to get approved for the card.
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No Late Fee – There is no late fee for the first 31 days that you don’t pay your bill on time. This means you have some breathing room before you have to pay late fees.
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No Penalty for Paying Late – There is no penalty for paying late. This means that you don’t have to worry about paying a big fee if you are just a few days late with a payment.
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5. MBNA Money Transfer Credit Card
The MBNA Money transfer credit card is one of the top choices for money transfer cards – especially if you have large amounts of debt. It’s great if you have higher debts that you’re trying to clear up and you want to try to collaborate things together and reduce your overall payments.
Interest Rate Depends on Applicant
The interest isn’t amazing, but it could easily be better than other things you have out there. That being said, the interest rate simply depends on the applicant. You will pay lower interest if you have better credit, they also have a specialized introduction interest free period.
Great Multipurpose Card
The card is multipurpose, meaning that customers can opt to use it for money transfers, or simply for regular credit card usage if you prefer. They don’t offer any added perks or rewards, but they make their best efforts to keep the card simple and reliable for daily use and transfers.
The thing that really sets it apart is the money transfer feature. A lot of basic cards out there don’t allow this type of transaction for their speciality or general use cards. You often have to find specific choices in order to accommodate the need for transfer and that can be a hassle.
The card is considered the best choice if you need to consolidate or pay off higher debts.
Interest Free Period
The interest free period for money transfers is one of the best features of this card. Very few competitors offer the same accommodations. You do pay a small fee to make your money transfer, and this fee is 3.49% at the time of this guide.
However, the plus side is how long you have to try to pay down that balance as much as possible without additional interest accumulation. According to MBNA, the timeframe can be up to 14 months depending on your circumstances, meaning that you have more than a year to work hard on paying down that debt with absolutely no interest charges.
The key thing to know about the interest free period is that you have approximately 60 days to make the money transfer to qualify for 0%. You will need to move quickly enough to satisfy that timing, but it also gives you plenty of time to take care of it.
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6. Tesco Bank Foundation Credit Card
If you have poor credit, it can be very difficult to find a credit card that will approve you. The only way to build back your credit is to start fresh and make solid payments without overextending yourself. But first you have to find a credit card that will approve you, and this is where the Tesco Bank Foundation Card comes in handy.
Ideal for Low Credit Score
The Tesco Bank Foundation card is named such because it gives the opportunity to create a credit foundation. It’s perfect for people who have no credit or bad credit history and simply can’t seem to get approved. They don’t accept everyone, but they are far more open than a lot of credit card providers out there.
Extra Perks
It’s also unusual to find credit cards for no credit and bad credit that will reward you and give you perks. But Tesco provides you with plenty of perks to go with their card. The perks include points, so you can accumulate points and cash them in for rewards.
Foundations to Improve Credit
This card is all about giving you a solution to help improve or build your credit. It’s a foundation, just like the name suggests. But it’s your responsibility to really make it work in that manner.
The APR is variable, but starts around 29.9%. So many card providers take advantage of people who just want to get approved and charge extremely high rates. Considering this is a low to-no-credit card offer, the rates are one of the lowest in this division.
Tesco Bank has set you up for success, but they can only do so much to ensure you get there. They provide a low APR, they approve your bad credit (or no credit), and supply all the tools to track and manage spending and make some positive changes to improve or build your credit.
In addition, they have a really great mobile app so you can track your spending and manage your account easily. They allow you to categorize and customize the style of your overall experience within the app.
As a customer, you will also get free access to your credit report for the first three years of holding the card. This is a great tool to help you monitor and keep track. If you’re trying to improve, you can use this free report as a tool to help you monitor your positions and track the score improvement.
It’s nice to have free credit reports so you can see what’s going on and work to give yourself a better foundation.
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7. Lloyds Bank Premium Low Rate Credit Card
Lloyds Bank is a local UK bank, which might make this a top choice for people who use their services – although it is worth noting that you don’t have to be a member of Lloyds Bank to qualify for their credit card. This credit card is great for general use but it was heavily designed to promote to people who wanted to transfer balances for payoff.
Access to Low Introductory Rate if You Qualify
The card offers a 0% introductory rate, but not everyone qualifies for this. Pay attention to the rate you are offered if you decide to complete an application. In most cases, the 0% offer applies specifically to money transfers, although it might apply to purchases for a limited time.
That 0% interest period can be granted for up to 18 months. Once interest kicks in on purchases or money transfers, it’s a reasonable rate that is competitive in the market. The money transfer fee is on the high side when compared to others in the market.
Much like other similar money transfer cards, the Lloyds bank card has no rewards or perks to offer. It’s just a simple, straightforward card with reasonable interest rates to make it worth your time.
Eligibility for Lloyds Bank Premium Card
The key factor on the Lloyds card is that while they promote you can attain 18 months at 0% interest, this is a limited feature. In order to qualify for that awesome promotion, you will need excellent credit. That’s attainable for some, but maybe not for everyone.
That being said, even if you don’t have excellent credit, you could still be approved. You will be offered a shorter time frame of 0% interest, but it’s still pretty reasonable. This period is 12 months rather than 18, which gives you a year of no interest, and that’s fair.
They have an eligibility checker tool that you can use to determine where you will fall and then you can make a decision from there. Applying for the card does check your credit, but the checker doesn’t so you get answers without the hard hit.
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8. Sainsbury’s Bank 17-Month Low Balance Transfer Credit Card
Here is yet another money transfer card with some really great perks. Sainsbury’s has a lot of different card options, but this one really stands out to us in the markets. The biggest detail calling our name is that you have no account fees and no balance transfer fees.
Most of the time, when you do a balance transfer, you’re looking at 3-5% fees on the balance you transfer. But that’s where this card stands out. They don’t charge you any fee to transfer. And on top of that, they give you 17 months of 0% interest.
These details alone push their card offers to the top of the list when you’re looking for a way to consolidate some debt and reduce your payments. You can also use the card for every day or general use, but the money transfer feature is certainly a winning note.
Great for Managing Debt
The card is actively designed to give you the ability to take control of your debt and start paying it down. It’s ideal for this purpose, and it shines. In addition, there are no monthly or annual fees to worry about.
When interest does start to accumulate, they offer some of the lowest interest rates compared to competitors. Most APR rates are listed at about 22%. You can earn Nectar rewards through this card, which is a nice perk and many money transfer cards fail to offer rewards.
Interest for the Win
This card may not be utterly perfect, but it definitely stands out in consideration of the interest details. Very rarely will you find a credit card that doesn’t charge significant fees for money transfers, or that just hands out 0% interest for steady timeframes.
While you do have to qualify for the card, all approved applicants get 0% money transfers and they are charged no fee for the transfer.
That 0% accommodation lasts for 17 months and it’s tied to purchases as well as money transfer balances. That is a significant length of time of not paying interest. If you’re looking for a way to consolidate debt and work to get things paid down, it’s a great way to accomplish progress.
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9. HSBC Student Credit Card
The HSBC student credit card was designed to give students the opportunity to build their credit in a positive way, and it is a card perfectly detailed to beginners in the credit industry. They maintain a low credit limit, as well as low fees and low APR ratings.
Great for Newbies to Credit
The idea is to help you understand how a credit card works and be able to build some credit without getting yourself in trouble. Some card holders feel the low credit limits are a negative factor, but if you think about limiting yourself from heavy debt accumulation as a beginner, it’s really a positive aspect for this particular card.
When you make purchases, you have 56 days of no interest. A great way to take advantage of this is to pay off the card monthly if you can. If you can’t pay it off monthly, make an effort to pay the majority and not just the minimum payment.
When you do accumulate a balance, the APR is low and reasonable. A lot of beginner credit card holders pay upwards of 30% APR, but that won’t be the case here. You also don’t have to worry about any type of annual fee. Just worry about learning to use and pay the card wisely.
Features
One of the best features of this card is the competitive interest rate. You’re looking at somewhere around 18% interest, which is incredibly low for a starter card. You will have a low credit limit as well, but that’s great for getting started. When compared to other similar cards, the interest rate reigns supreme.
Not Too Many Fees
The only other fees you have to worry about are if you pay your payment late or a cash withdrawal fee if you use the card to take out cash. These fees could add up over time, so be sure to use and pay your card responsibly.
Applying is easy and you will have access to an app to track and manage the card. HSBC does require you to open a savings account to qualify, but you can do both of these online.
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10. British Airways American Express Credit Card
If you’re looking for a credit card that will give you some rewards for flights, the British Airways AmEx is a great option. This is one of the best reward cards out there in terms of point accumulation and card features, and offers a dollar for dollar match on the point system, giving you a lot of great perk access.
In addition to those reward points, you also have first class access to several other perks and rewards as they are available. They run promotions often that apply even to their current cardholders.
Rewards and No Annual Fees
The points are easy to understand so you won’t have any confusion about how it works. The downside is if you aren’t regularly paying off your balance, their APR is a bit on the high side. Considering this is a rewards card, the APR seems unbalanced at about 28%.
However, they don’t charge any annual fees, which is a positive you don’t find on a lot of rewards cards like these. The card doesn’t offer any delayed interest perks for purchases, but you have 56 days before interest accrues, giving you some time to pay down or off on spending.
This is an overall good card if you want the rewards. You do need a relatively high credit rating to get approved. They provide an eligibility checker tool to help you determine whether it’s worth the application or not.
Purchase Protection
A lot of cards will offer you purchase protection or other insurance additives for a fee. However, this British Airways AmEx actually provides you purchase protection at no cost to you., and they will reimburse you significantly for situations that are called for., offering extra peace of mind and security.
You can take advantage of the purchase protection perk up to 90 days after your purchase. The process is simple, but you do have to qualify to use it. On top of the purchase protection, they also provide refund protection.
If you make a purchase and then attempt a refund and you run into roadblocks, the card company will take care of eligible refunds within 90 days of the purchase.
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Best Credit Cards – Buying Guide 💳
Thinking about getting a credit card?
Before you do, you might be wondering: Why do credit cards work the way they do? And why do you have to answer so many personal questions and what kind of information lenders will see when they review your application? Read on to learn more.
History of Credit Cards in Britain
In the mid-19th century, the Bank of England began to issue notes redeemable in gold or silver coins. These notes were considered a legal tender for all debts.
In the early 20th century, this law was extended to cover all banknotes issued by other banks and in 1926, it was extended to include all forms of credit cards.
The use of credit cards in Britain became widespread during the 1960s and 1970s. Prior to this time, cash transactions were still very important in Britain and people had not yet embraced plastic money as they did throughout most of the rest of Europe.
By 1980 there were more than 1,200 different types of plastic money and about two thirds of the population were using plastic money. By the 1980s almost everyone had a credit card that allowed them to spend money on goods and services whenever they wanted.
What do Credit Card Companies Look for When They Review Your Application?
When applying for a credit card, you’ll complete an application form and apply for a credit limit of a certain amount. The credit card company will then look at the information you provide in the application.
What will they be looking for? The most important thing the credit card company will be looking for is the ability to repay the debt you owe. They’ll also be looking to see if you have a steady income, and whether you have a good credit score.
The credit card company will also look at your credit history and make sure you don’t have any prior bankruptcies – this could be a sign that you are an unreliable borrower, and makes you a higher risk.
What Information Will Lenders See When They Review Your Application?
If you are approved for a credit card with a low limit and are only going to use it occasionally, then lenders won’t see much of anything when they review your application.
However, if you apply for a card with an increased limit or decide to apply for a store-branded card like those offered through department stores like Argos or TK Maxx, lenders will see more information. When lenders review your application, they’ll see the following:
- ☑️ Your name & address
- ☑️ Social Security number
- ☑️ Date of birth
- ☑️ Employment history & income level
- ☑️ Length of time at current job or self-employed
- ☑️ Bank accounts, retirement funds and investments you have in place
- ☑️ Credit report & score (depending on the credit card company)
Some lenders will also want to see a list of all your debts and monthly payments. If you are applying for a store-branded card, the lender will also want to know how much you spend on various items at that store.
Why Credit Card Companies are Concerned with Your Financial History
Credit card companies are concerned with your financial history because of one simple reason: they want to make sure you’re responsible enough to pay the money you owe.
If you have any prior bankruptcies, or if your credit score is below a certain threshold, then it could mean that you’re not responsible enough to make the monthly payments on time. If the credit card company believes this is the case, then they will deny your application for a credit line.
How Does a Credit Card Application Work?
In order to apply for a credit card, you’ll need to provide your personal information to the credit card company. The exact information you’ll need to provide will depend on the kind of credit card you want, but will typically include your spending, income, and addresses to allow them to check your credit history.
The lender will review your application and decide whether or not to approve your credit card. If the lender approves your application, you’ll be sent your new credit card in the mail. If your application is denied, you’ll probably receive a letter explaining why. If this happens, you can try to apply for another type of credit card and see if that one is approved instead.
Just remember that everytime you apply for credit, a note will be left on your credit file, and this can make it tricker to secure successful future applications.
How Does Credit Card Technology Work?
- ☑️ The information you provide in the application is sent to a credit bureau. The credit bureau is a company that keeps track of your credit utilisation and payment history. Credit card companies purchase the information from the credit bureau, which keeps the information private. This way, the credit card company doesn’t know what information the credit bureau has about you.
- ☑️ The credit bureau then checks to see if you’ve ever had a credit card before. If you have, the credit bureau will check your payment history and how much you borrowed.
- ☑️ The credit bureau will also check to see if you have any unpaid debts or bankruptcies filed against your name. If the information matches what the credit card company has on file, the credit card company will approve your application and send you a new card in the post within seven to ten business days.
Things You’ll Need to Know When Applying for a Credit Card
If you are in the process of applying for a credit card, check out these potential scenarios, and the solutions you can use to improve your chances of success.
1. You have a bad credit history and no proof of steady income – If you have a bad credit history, it means that you’ve had unpaid bills or bankruptcies filed against you in the past. If you don’t have any proof of steady income, this means that you don’t have a job and/or can’t prove that you make enough money to be able to pay back your debt on time – in this case, your chances of a successful application are slim.
2. You don’t have any identification information on file with the credit card company – The easiest way to apply for a credit card is by filling out an online application form with all of the information you need – once you have done this once, you will start to build credit and have details on file.
3. You have no collateral – If you don’t have any assets or collateral to offer up, but you apply for a credit card and get approved for it, this means that you may have to pay the balance off in full each month or risk getting your credit score dinged for not being able to pay your bills on time.
4. You are under-aged – Credit card companies often require that you be 18 years old in order to apply for a credit card – applicants under this age will be rejected for credit.
5. You are over-aged – This is rare, but some credit card companies have an upper age limit when it comes to applying for a new line of credit (such as American Express, who won’t allow anyone over the age of 70 to apply for a new line of credit).
FAQs
Still got questions? Here are some of the most commonly asked questions, and the answers you need to know.
How Long Does it Take to Get Approved?
Credit card companies typically take a few days to review your application. The goal of this review is to see if they would be willing to extend a credit line to you. They will review your application, pull your credit report and then make a decision on whether or not they will approve you for the card. If they do approve you, they’ll then issue a credit limit amount, which is the maximum amount of money you can spend on the card each month.
Can I Increase My Allowance?
You can request an increase in that amount after some time if your payment history has been good. You might also get approved for a higher credit limit right away if you have good income or a high enough credit score, and this will also help you to obtain better credit card deals.
Can I Get a Credit Card With a Low Credit Score?
A low credit score will not necessarily stop you getting a card – the trick is to apply for a foundation or credit builder card. Use this responsibly, make your payments on time, always make your minimum monthly payment, and you will see your credit score start to creep up. Just be aware that you will likely have a lower limit.
