Good card bad card: how to spot the right credit card

As a nation, we have completely fallen in love with credit cards, but many of us might not be aware of what constitutes a good or bad credit card.

With so many cards now available to the adult consumer, it’s no wonder that some individuals find themselves overwhelmed by what cards to apply for and end up knee-deep in debt, having failed to compare credit cards before choosing a bad card over a good one.

If you’re thinking about applying for a credit card or changing from one provider to another, here are some key issues to consider so you can avoid repaying more than you ought to and ending up entwined in a downwards spiral of debt.

The best card

Start by asking yourself why you need a credit card and what purpose it will serve. There are so many different types of credit cards with their own terms and conditions: some are specifically geared towards balance transfers, while others will reward you with cash back for spending. With this in mind, it’s invaluable that you work out prior to applying what exactly you need credit for so that you can select the type that benefits you the most.

Balance transfer

If you haven’t been able to pay off your credit card every month and have found the debt growing over a period of time then it’s absolutely critical that you consider a card that allows you to transfer your balance to pay it off at a lower rate, or no rate at all if you can secure a 0% deal and pay it off before a higher rate kicks in. These types of cards are best for individuals who have a large balance to pay and who need time to pay the total balance. These cards are not to be used for purchasing goods and services as the APRs are usually very high.

0% purchase

These types of cards are the ones that you use for spending, as they’ll offer 0% on any purchases for a limited time. These cards are best for those who are looking into making a big purchase and need some time (perhaps six months) to pay off the balance within the interest free period. These types are also good for entrepreneurs who wish to start a business and need credit to fund their start-up office equipment or any supplies, with a view to paying off the card within a few months.

Cashback and rewards

These cards reward you for spending, so that for every pound that you spend, you’ll receive cash or air miles. These cards are best for individuals who are good at paying off their credit card balance in full at the end of every month and be rewarded for spending.