The 10 Best Credit Cards in the UK

The 10 Best Credit Cards in the UK

Updated 14 April 2021

Written by Nikki Dale

What Is a Credit Card?

A credit card is a way to spend money that you don’t have, by having access to a set limit of funds provided by a bank or other financial institution.

Credit cards can be used to make purchases (much the same as a debit card) and then the money spent has to be repaid, either in full or in monthly instalments.

Unlike a loan or a mortgage, the amount of credit available on a credit card is usually relatively small, depending on circumstances like your current financial situation and your credit report (which describes your financial history).

You can spend up to the amount set as your credit limit. If you do not pay off the balance within the statement period, you will have to pay interest on what remains.

This means you may end up paying back significantly more than you borrowed.

When you are deciding on the best credit card for you, there are different criteria that you can use.

You may come across unfamiliar terminology. The short glossary below explains the most common terms:

  • Annual fee – This is the cost of using the credit facility and is separate from other fees. Sometimes this is a monthly fee.
  • APR – This stands for ‘Annual Percentage Rate’, which describes the interest rate over a period of 12 months. You could consider this the actual cost of borrowing. If the APR is 20%, a balance of £100 over 12 months would mean you will repay £120. No interest is charged, however, if the balance is paid in full and on time.
  • Balance – The money you owe to the credit card company or bank.
  • Balance transfer – Moving the balance from one card to another, usually to avoid high-interest charges and to take advantage of 0% introductory rates to pay off debts. This usually comes with a balance transfer fee of between 1–2% of the balance to be transferred.
  • Credit limit – This is the maximum amount that you can spend on a credit card. Usually, the higher your credit score, the higher your credit limit.
  • Credit score/report – Your credit report is a collection of all the information regarding your financial history. It shows what credit you have used and how well you have managed your credit accounts – including any missed payments or other issues. Your credit score is a number based on the report and is used by the credit card companies to help them decide on your eligibility.
  • Cash withdrawals – Although a credit card can be used for purchases in the same way as a debit card, withdrawing cash from a credit card is expensive. There are fees per transaction and generally higher interest too.
  • Default – If you miss several payments, a default will be registered. This usually means you have 14 days to pay the amount in the default notice. Defaults are recorded on your credit file and remain there for six years. They can also have a negative effect on your ability to gain credit in the future.
  • Foreign transaction fees – If you use the card to shop abroad or online in a foreign currency, you may be charged a fee in the form of a percentage rate. Sometimes there may be a transaction fee too.
  • Interest-free – An amount of time (usually in an introductory period) when no interest is applied to balances. To make the most of the interest-free period, pay the balance before the rate reverts back.
  • Minimum payment – Every credit card has a minimum monthly payment that must be made if there is a balance. This usually consists of a percentage of the balance as well as any interest or fees. The minimum monthly payment will be on the statement. It is worth remembering that you will be paying significantly more (and for significantly longer) if you only pay the minimum monthly amount.

What Types of Credit Cards Are There?

Not all credit cards are the same, and this can make choosing the right one for your situation difficult. Knowing about the different types will help you narrow down your options.

0% Purchase Credit Cards

Some cards offer an introductory 0% interest rate on purchases.

These cards are great if you are planning a big purchase, such as a holiday or a car, and want to spread the cost over several months rather than paying it off all at once.

Using a credit card for bigger purchases has the added benefit of protecting your purchase and preventing fraud, as well as giving you more time to pay.

Remember to pay the balance before the introductory rate ends, otherwise you will end up paying interest as well.

0% Balance Transfer Credit Cards

Consolidating credit from multiple sources (like other credit cards, store cards or personal loans) means one payment will go out.

Cards that offer a balance transfer facility will usually have an introductory period with 0% interest to make it faster for you to clear the balance.

Make sure that you can clear the balance before the end of the introductory period or be prepared to move the balance to another balance transfer card so that you avoid the interest charges.

Credit-Building Cards

If you have no credit history (for example, as a student) or a bad credit history that you want to improve, a credit-building card is the best option.

They are usually more accepting of poor credit and offer manageable credit limits so that you can demonstrate you are able to meet your payments.

Credit-building cards usually have a much higher APR than other credit cards.

Business Credit Cards

A business credit card can be used to make purchases for a business and may offer extra cards to a specific account so that employees can charge things like expenses.

As they are made for businesses, they can offer a much higher credit limit than personal credit cards.

Reward Credit Cards

Reward cards are often provided by retailers in their banking arm, and the rewards tend to come from earning points on spending.

You can earn a certain number of points for every pound spent, and these can either be converted into vouchers towards shopping in that store or converted for use with other retailers (depending on the provider).

These cards may also have bonuses upon opening an account.

Cashback Credit Cards

Similar to a reward card, a cashback card offers a percentage of your spending back to you as cash.

Usually, this is less than 1% of the total spend, but there are some cards that offer more than 1% – and you can find introductory offers with up to 5% cashback available.

Student Credit Cards

As the name suggests, these are credit cards aimed at students.

As most students will not have any credit history, student cards that are tied into student bank accounts are more relaxed regarding eligibility.

However, you will need to prove that you are enrolled on a 2+ year course at college or university.

Student credit cards will have a manageable credit limit like the credit-building cards, but as they are tied to a bank account, they usually have a much better APR.

Travel Credit Cards

Foreign transaction fees can make it expensive to use a credit card abroad, so for frequent flyers, a card that is designed for travel is an attractive option.

Travel cards will not charge fees for using the card for purchases abroad, and they often come with other travel-related perks like travel insurance or air miles.

Reasons to Get a Credit Card

The obvious reason to get a credit card is to borrow money, but there are some other savvy reasons why having a credit card could be a good idea:

Credit Score

If you are looking to build (or rebuild) your credit score, then a well-managed credit card can make all the difference.

Making regular payments, on time, and keeping below your credit limit will have a positive effect on your credit history, making you more eligible for other credit in the future like a loan or even a mortgage.

Cheap Borrowing

Taking out a 0% interest credit card can be a less expensive way to borrow smaller amounts of money – as long as the balance is cleared during the 0% period.

If you don’t have a 0% period, then the higher APR will cost you considerably more in the long run, and in some cases, a loan might be a better idea.

Rewards, Cashback and Extra Features

Credit card companies want you to choose them when you are considering a new credit card, so they offer enticing rewards. Some of these can boost your bank balance in different ways.

Whether it is cashback, points, air miles or discounts, reward credit cards offer you something back for spending money you were going to be spending anyway.

This is not an excuse to go on a shopping spree. Keep in mind that you will have to pay back what you have borrowed, as well as fees and interest.

Extra features with some cards might include lower fees, insurance or even gift cards.

Fraud Protection

Credit cards offer greater protection against fraudulent transactions than debit cards, thanks to Section 75 of the Consumer Credit Act.

If you notice suspicious activity on your credit card or a transaction you do not recognize, simply report it to the lender and, usually, you won’t have to pay the amount owed.

Top 10 Credit Cards in the UK

These cards are the best of the bunch from well-known banks and financial institutions, grouped by their main features.

Best All-Round Credit Cards

All-round credit cards offer something for everyone and are best if you need a good deal on both balance transfers and purchases.

Top 10 Credit Cards in the UKTop 10 Credit Cards in the UK

1. Santander All in One

Fees: £3 per month
Representative rate: 23.7% APR
Credit rating required: Good/excellent

Although the Santander All in One credit card does charge a monthly fee, it also offers a competitive APR and some good perks that make it a great choice for an everyday, general-purpose card.

Introductory rate:

  • 0% on balance transfers for up to 26 months
  • 0% on purchases for up to 20 months

Rewards/perks:

  • No balance transfer fees
  • No foreign transaction fees (as long as you pay in local currency)
  • Up to 15% cashback when you sign up to Retailer Offers

Pros:

As an all-round card, this offers a really substantial interest-free period for both balance transfers and purchases as well as no fees for foreign transactions and balance transfers.

Cons:

The APR outside of the introductory rate is pretty high in comparison to other similar cards, and the monthly fee could be a problem when other cards do not charge any fee.

Visit Santander All in One

2. Tesco Bank All Round

Fees: None
Representative APR: 19.9%
Credit rating required: Good/excellent

No fees, a lower APR than comparative cards, and a good interest-free period make this a great choice for an all-round card.

If you are a Tesco Clubcard customer, there are extra perks too.

Introductory rates:

  • 0% on balance transfers for up to 12 months
  • 0% on purchases for up to 12 months

Rewards/perks:

  • No balance transfer fees
  • Extra Clubcard points for every £1 spent both in-store and elsewhere (enhanced rate for Tesco purchases)

Pros:

This card offers a great introductory period for both purchases and balance transfers without charging fees.

The rewards can add great value for a Tesco customer.

Cons:

If you aren’t a Tesco customer, the rewards won’t be of value to you.

Visit Tesco Bank All Round

3. Virgin Money All Round

Fees: None
Representative APR: 21.9%
Credit rating required: Good/excellent

A card from Virgin Money offers discounts on Virgin Group products and lengthy introductory rates for both balance transfers and purchases.

Introductory rates:

  • 0% on balance transfers for up to 23 months – 2.9% balance transfer fee
  • 0% on purchases for up to 20 months

Rewards/perks:

  • Discounts on Virgin Experience Days, Virgin balloon flights and wine

Pros

One of the longest 0% balance transfer introductory periods and great perks if you use Virgin Group products.

Cons

The APR isn’t as low as other cards and the balance transfer fee can add extra cost if you are moving money across to it.

Visit Virgin Money All Round

Best 0% Purchase Credit Card

4. TSB Platinum Purchase Card

Fees: None
Representative APR: 19.9%
Credit rating required: Good/excellent

This is a simple, no-nonsense card that offers interest-free introductory periods on both purchases and balance transfers.

Introductory rates:

  • 0% on balance transfers for up to 20 months, 2.95% balance transfer fee
  • 0% on purchases for up to 20 months

Rewards/perks: None

Pros:

Low APR and lengthy interest-free period, simple card with no bells and whistles.

Cons:

No special bonuses and the 2.95% balance transfer fee is higher than most other cards.

Visit TSB Platinum Purchase Card

Best 0% Transfer Credit Card

5. Halifax Low Fee 0% Balance Transfer

Fees: None
Representative APR: 19.9%
Credit rating required: Good/excellent

This balance transfer card has a long introductory interest-free period to give you the best chance of paying off the debt. It also has a relatively low APR after that period.

Introductory rates:

  • 0% on balance transfers for up to 23 months, 1.5% balance transfer fee
  • 0% on purchases for up to 9 months

Rewards/perks: None

Pros:

Great length of introductory period and a fair 0% interest period for purchases too.

Cons:

Despite being a card designed for balance transfers, there is still a balance transfer fee.

Visit Halifax Low Fee 0% Balance Transfer

Best Credit-Building Card

6. Capital One Classic

Fees: None
Representative APR: 34.9%
Credit rating required: Low/poor

This is a card for people looking to build (or rebuild) their credit.

With a lower credit limit, it should be easier to make and manage repayments to demonstrate your responsibility to future lenders.

Introductory rates: None

Rewards/perks:

  • Manageable credit limit of £200–£1,500 (subject to status)
  • Two optional credit-limit increases a year if you meet requirements

Pros:

This is a popular choice for those with limited eligibility for other credit and, if managed well, can be a great option for building credit.

Cons:

To mitigate risk, Capital One offers a very steep APR and no introductory rates for purchases or balance transfers.

Visit Capital One Classic

Best Cashback Credit Card

7. American Express Platinum Cashback Everyday Credit Card

Fees: None
Representative APR: 22.2%
Credit rating required: Good/excellent

American Express offers credit card holders quite a few perks – and its cashback offer is better than anything else on the market at the moment.

Introductory rates: None

Rewards/perks:

  • 5% cashback on all purchases in the first three months (up to £100)
  • 0.5% cashback on spends up to £5,000
  • 1% cashback on spends of more than £5,000
  • Access to Amex global assist services

Pros:

Every purchase can make you money – which makes using your Amex card preferable when making big purchases.

Cons:

No introductory interest-free period for purchases or balance transfers.

Visit American Express Platinum Cashback Everyday Credit Card

Best Reward Credit Card

8. M&S Bank – Reward Plus Credit Card

Fees: None
Representative APR: 19.9%
Credit rating required: Good/excellent

The Marks & Spencer Reward Plus credit card offers a relatively low APR and a huge swathe of rewards for shopping, especially valuable for M&S customers.

Introductory rates:

  • 0% on balance transfers for 6 months, 2.9% balance transfer fee
  • 0% on purchases for 6 months

Rewards/perks:

  • 500 points (worth £5 at M&S) sent with card
  • Choose paperless billing for a further 1,000 points
  • 2 points earned for every £1 spent at M&S in the first year
  • 1 point for every pound afterwards
  • 1 point for every £5 spent elsewhere

Pros:

Brilliant offers for those who shop in M&S, with a lower APR and reasonable introductory offers.

Cons:

Hefty balance transfer fee and the rewards aren’t useful if you aren’t an M&S customer.

Visit M&S Bank – Reward Plus Credit Card

Best Student Credit Card

9. HSBC Student Credit Card

Fees: None
Representative APR: 18.9%
Credit rating required: Poor/none

For a student with no credit history, getting a credit card is difficult unless it is made for students.

This one is tied into a student bank account from HSBC with a low credit limit and APR.

Introductory rates: None

Rewards/perks:

  • Manageable credit limit from £250
  • Earn cashback through Visa Offers

Pros:

Excellent for students just learning to manage credit with a great low APR rate for a card made for those with no credit history.

Cons:

Must have a student account with HSBC and prove enrolment on a college or university course lasting more than two years.

Visit HSBC Student Credit Card

Best Travel Credit Card

10. Halifax Clarity

Fees: None
Representative APR: 19.9%
Credit rating required: Good/excellent

The Halifax Clarity card is designed for regular travellers who often make purchases in a foreign currency.

Introductory rates: None

Rewards/perks:

  • No foreign transaction fees
  • Worldwide fee-free ATM withdrawals (although the ATM operator might charge a fee)
  • All spending converted to sterling on your statement

Pros:

Simple, straightforward credit card for foreign currency purchases and cash withdrawals.

Cons:

No perks or benefits added, and some other cards with more bonuses also offer fee-free travel spending.

Visit Halifax Clarity

Final Thoughts

When considering a credit card, there are many different options available and the best way to decide which one is right for you is to really think about why you need it.

There are always more options available to those who have a higher credit score, so to see if you are likely to be accepted you can check your credit report for yourself using a facility like Experian or Equifax.

Most credit card companies now offer an eligibility checker which performs a search on your credit file without adding any more information.

Several credit applications in a short space of time, whether you are accepted or denied, can have a negative effect on your score.

When considering credit cards, remember that you are liable to pay back any spending plus interest and fees, so be sure you can afford at least the minimum monthly payments.

It is always much better to pay the balance in full and on time, especially if you are taking advantage of a 0% interest introductory offer.

Failure to keep up your repayments will reduce your credit score and make it much harder to get credit in the future. Defaults stay on your credit history for six years.

WikiJob does not provide tax, investment or financial services and advice. The information provided is for general reference and you should not rely on it to make (or refrain from making) any financial decisions. Personal situations will vary. Always seek independent financial advice when choosing how to manage your finances.