When choosing a credit card, you'll probably quickly find out that there are a huge number of credit cards available and picking the most suitable one is not easy.
The interest rates applied to new purchases can vary widely – and many providers now offer low rates on debts transferred from other credit cards.
It is worth also thinking about other benefits such as low charges for overseas use or rewards and cashback on any spending.
So what is the best way to compare cards? We go through five top tips to show you how to choose a credit card...
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1. Do you have existing credit card debts?
If you have substantial debts on your current credit card and are paying a large amount of monthly interest, it is worth considering a “balance transfer” card.
These allow you to move debts to a new zero-interest card: the interest-free period can last for as long as three years in some cases. Balance transfer cards may offer interest-free periods on new purchases as well.
Each transfer carries a fee, which is a proportion – usually around 3% – of the debt you move.
To get the right balance-transfer credit card, compare the fee, the length of the interest-free period, and the conditions on new spending.
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2. Can you clear your balance every month?
If you don’t want to transfer a debt and you think you can pay off whatever you spend on the credit card every month, the interest rate doesn’t really matter.
Interest charges are only incurred on debts carried over into a second month.
So if you do not need to borrow money on your card, and instead just want to rack up reward points or spend more cheaply on holiday (see below), you don’t need a low-interest credit card.
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3. Do you want to finance a big purchase?
If, on the other hand, you want to buy a new car or put home improvements on credit, choosing a credit card with a low or zero-rate on new spending is what you’re looking for.
This gives you a period, in some cases more than two years, to pay back the original debt without running up interest costs.
4. Are you planning to go abroad?
There can be significant differences in charges on overseas spending and cash withdrawals using plastic – even debit cards can be very expensive.
In this instance, it's worth choosing a credit card which has low foreign-usage charges.
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5. Do you want to earn rewards?
Other credit cards may give you cashback on certain types of spending or rewards than can be converted into money-off vouchers at particular retailers.
Rewards cards are an especially good idea if you can pay off any debt at the end of each month. If not, the interest charges you run up could outweigh the value of the rewards.
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Whether you’re looking to save money when travelling abroad, transferring a balance from another card or just looking for a great all-round credit card, the Saga Platinum credit card, provided by Allied Irish Banks, p.l.c. could be a smart choice.