If you owe money

You can use a credit card to pay off existing debts. You then pay back the balance on your new credit card instead, which could cost you less.

Some credit cards come with 0% deals, meaning you pay no interest for several months, but many charge a fee. You can use them to:

Clear your credit card balance

If you have a credit card and owe money on it, you can take out a new card and use it to pay off your old one using a balance transfer.

You then repay the amount you owe on your new card, which could save you money if it has a lower APR or is interest free. Here is how balance transfers work.

Clear your overdraft or loan

You can use a money transfer credit card to pay off an overdraft or loan.

After you take out the card, you can transfer money from it to your bank account. The maximum amount is decided by the card provider.

You can use it to pay off any debts or spend it how you like, but you then owe this amount plus any fee on your credit card. Some deals come with a low APR or an interest free period.

Can you pay back what you spend every month?

No? Borrow as cheaply as possible

If you do not pay the full balance on your statement every month, you have to pay interest. This is likely to come to much more than any cashback or benefits you could earn.

You could cut how much this costs by getting:

  • A credit card with a low interest rate. This could save you money because the interest you pay each month would be lower than a card with a higher APR.

  • A card that offers an interest free period on purchases. This would let you buy things and pay off the balance over several months without charging any interest.

Yes? Earn cashback or rewards

Paying your balance in full means you could pay no interest or charges on your credit card. This makes the interest rate less important, so you could instead get a card that offers benefits like:

  • Cashback, which is when you are paid back a percentage of what you spend on your card, usually annually.

  • Air miles, which are points you earn when you spend on your card. You can use these points to get flights and other services from the airline that offers them.

  • Rewards like shopping vouchers, hotel vouchers or football merchandise. You get back a percentage of what you spend on your card, usually each year.

Have you had a credit card before?

Fewer credit cards are likely to accept you if:

  • You have never taken out a credit card or borrowed money before

  • You have missed repayments when you have used a credit card in the past

However, there are cards designed for:

When you get your first credit card

If you have never borrowed money before, credit card providers cannot check how well you can keep up with repaying them.

Although this could put off some providers, there are some that could still accept you. Here is how to get your first credit card.

You could also get a credit card if you are a student. They are usually only available if you have been accepted on a full time course at a university or college in the UK.

Their providers look at your student loan as part of your income, which could help you get accepted.

If you have bad credit

Credit card providers check your credit record when you apply.

It could put off some providers if you have borrowed money before and have:

  • Made late payments

  • Gone over your overdraft or credit limit

  • Been rejected by other providers or lenders

  • Been made bankrupt or been given a County Court Judgment (CCJ)

However, here is how you could still be able to get a credit card with bad credit.

Visa, MasterCard or American Express?

You can get credit cards from banks and other financial companies, but the transactions on every card are processed by a separate company. In the UK, this is usually:

  • Visa

  • MasterCard

  • American Express

Here is what these companies do when you use your credit card.

Each company offers benefits like discounts and early access to buying event tickets. But a card that suits your financial circumstances is likely to save you more money than choosing which company processes its transactions.

Do you need a card you can use abroad?

You can spend on most credit cards outside the UK, but it can be expensive. Here are all the charges you pay when you use a credit card abroad.

If you travel frequently and intend to use your credit card, you could find one with a low interest rate and no fees for transactions or cash withdrawals.

You could use that card in the UK too, or get:

  • One card that is cheap to use abroad

  • Another card to use at home that offers benefits like cashback or a low interest rate

Do you run your own business?

You can get a credit card in the name of your business if you are a sole trader or look after the finances of a company of any size. They can help you keep your own money separate from your business' spending.

Although they come with the same features as normal credit cards, they sometimes offer extra cards so several employees can make purchases, and itemised statements to track their spending.