Credit card advice

Credit cards are increasingly useful things to have in this day and age - but with so many different deals on offer, how do you know which is best?

In fact, the `best` credit card for you depends entirely on what you`re looking for. Here`s a quick breakdown of different types of credit cards that could help you to make more of your money.

Credit cards for spending

The `traditional` credit card is designed for people who want to use their card for spending. The idea is quite simple: you spend on your credit card, and then repay the debt at some point in the future.

However, you shouldn`t just apply for any credit card deal you can find. There are various benefits that could make your spending on your credit card easier to manage and/or more rewarding.

For example, a credit card offering 0% interest on purchases allows you to spend money interest-free for a certain period. On the other hand, a cashback credit card could give you money back on all the purchases you make, usually in the form of an end-of-year lump sum.

Credit cards like these could be ideal if you`re planning to use your credit card for regular spending. However, do remember that you`ll need to repay what you owe before your interest-free period ends to avoid paying interest (or before the end of the month if there`s no interest-free period advertised).

Credit cards for repaying debt

Some credit cards make it easier to repay debt. 0% balance transfer credit cards don`t charge any interest on balances shifted across from other cards for a limited period, enabling you to repay those debts interest-free.

Of course, to avoid paying any interest at all, you`ll need to either pay off the debt in full before the interest-free period ends, or switch to a similar deal on another card in time.

Credit cards for rebuilding your credit rating

If you have a bad credit rating - or alternatively if you have had no experience with credit cards in the past - then a credit builder card or a bad credit credit card could be what you`re looking for.

These cards are basically aimed at people who don`t have access to the better deals on offer. They can carry a much higher interest rate than regular cards, but can also be much easier to obtain.

The idea is that the more you use these cards responsibly, the more you will be demonstrating to future lenders that you are a good borrower (evidence of which will appear on your credit history).

And as long as you repay your balance in full every month, you`ll never pay any interest at all, regardless of the rate. Be warned, though: if you can`t do this, you could face some big bills when the interest starts to build up.

Compare different types of credit card with our free online comparison table.

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