Take the MSE Credit Card Challenge

5 quick questions to find the perfect plastic to save you £1,000s or make you £100s
Even if you don't have a card already

One of the most difficult questions we're asked is: "What's the best credit card?" The issue is that the question wrongly assumes all credit cards are the same type and do the same job.

Yet if you strip off your clothes and step into a bath of plastic (forgive the inappropriate visuals, they're Martin's words), you'll come to the realisation that each card has its own fit. Some are best for spending on, others for borrowing, travelling abroad, protecting purchases, giving rewards and more.

So today we're stepping out of the bath (again, sorry - Martin's the boss) to give you our credit card challenge (phew, back on safe territory again) to ensure you have the right card for the right purpose. So simply answer each of the questions below to find out if you can save.

And if you have two or more cards and already use them for different purposes, don't worry, you can have more than one foot in each camp (or bath).

Credit cards are often, rightly, demonised. Used wrong, they're debt cards that cause nightmares. Yet equally debit cards (ie, bank cards) are debt cards too for those who are overdrawn and use them wrong. Plus these days, with 40% APR overdrafts, debit cards can be far costlier than credit cards.

If you don't have a credit card because you've been burnt in the past, or don't trust yourself with one, then don't touch 'em. Don't read on. Stop here. Yet if you don't have one because you just think they're all bad, think again.

Firstly, you only get Section 75 protection with credit, not debit cards. That means if you buy something costing £100 to £30,000 on a credit card, and pay for any of it (even 1p) on the card, then the card firm's jointly liable with the retailer for the ENTIRE amount. This get-out-of-jail-free card is hugely powerful if the retailer goes bust or won't play fair.

Also, some cards pay you to spend on them, and as long as you don't use them for borrowing, you can earn £100s/yr (see Q3 below). And finally, if you're new to credit, then getting a credit card and spending say £50 a month on it each month, ensuring you pay it off IN FULL each month, can start to improve your creditworthiness. See credit (re)build cards for more.

A balance transfer is where you get a new card which pays off debt on old cards for you, so you owe the new card, but at 0%. The savings can be huge as Gary said: "A big thank you. I'll go from £85/mth [£1,020/yr] interest to £0. What a saving." 

The longest 0% card is from TSB* at up to 29mths 0% with a one-off 2.95% fee. As it's an 'up to' length, some accepted custs get a shorter 0% (26 or 23mths) depending on their credit score. Alternatively, all accepted M&S Bank custs get 28mths 0% for a slightly lower 2.85% fee. Note the M&S link goes to our balance transfer eligibility calculator on its request (to prevent calls from those rejected from clogging lines for vulnerable custs). It shows your chances of getting this card without impacting your credit file.

If you can pay off quicker, Santander* is 18mths 0% with NO FEE, so there's no cost at all if you clear within that time, and it too is in our eligibility calc. For many more cards, see our Best Balance Transfers guide.

If you get these cards, ALWAYS FOLLOW THE GOLDEN RULES:

1. Clear the card or transfer again before the 0% ends, or the rate soars - TSB & M&S go to 19.9% rep APR, Santander to 18.9% (see APR Examples.)
2. Never miss the min monthly repayment, or you may lose the 0%, get hit with a £10-ish late fee and get a credit report black mark.
3. Don't spend/withdraw cash - it usually isn't at the cheap rate.
4. You must usually transfer within 60 or 90 days to get the 0%.
5. You can't balance-transfer between two cards from the same banking group with any of the cards above.
6. Important. Balance transfers are for those who can meet repayments. If you're struggling, check out Covid-19 credit card payment holidays and our Debt Help guide for alternative options.

When you use a card to pay, the card firm charges a retailer. However, there is a way to get some of that money back into your pocket.

Rewards cards give you cash or loyalty points when you spend on them. So as long as you repay them IN FULL each month (preferably by direct debit so you never forget) and don't bust your credit limit, you neuter the 'debt element' of the card, and just have plastic that pays you to spend on it. Jo told us she uses two reward cards to buy most things on: "Made over £350 on each of them this year."

To max it, do all your normal spending on the card, though it's not an excuse to overspend. But if you don't always repay in full (or can't), then don't bother as the interest will dwarf the rewards.

The top fee-free card is the Amex Platinum Everyday*, which pays 5% for the first 3mths (max £100 reward) then up to 1% - though you have to spend £3,000+ on it in a year to get any cashback. Better still, it's in our cashback and reward cards eligibility calculator , so you can see your chances of getting it without impacting your credit file.

There's also the similar Amex Platinum* card, which pays slightly more generous cashback but has a £25/yr fee - it's generally better for those who spend more than £10,000/yr. It too is in our cashback and reward cards eligibility calculator. 

These cards also include £2,500 purchase protection, which means you get a refund (minus £50 excess) if the item you've bought is stolen or accidentally damaged within 90 days of purchase. This makes them very powerful cards for protection and rewards.

For lots more options, including airline reward points or supermarket-linked vouchers and non-Amex cards, see our full Cashback and Rewards Credit Cards guide.

If you get these cards, ALWAYS FOLLOW THE GOLDEN RULES:

1. Clear IN FULL each month or these are 22.2% and 27.3% rep APR (see APR Examples).
2. You're not eligible for the 5% intro bonus if you've had a personal Amex in the last 2yrs.
3. Never miss the min monthly repayment, or you'll pay a £10ish late fee and get a credit report black mark. But as we say above, if you don't repay IN FULL each month, don't bother getting these cards.
4. Don't withdraw cash - it's expensive & there's no reward.
5. Never go over your credit limit or you'll pay a £10ish fee.

Credit cards are like fire, as used right they're a useful tool, but used wrong they burn. Ultimately, credit card firms want you to use them to borrow on. And done right there's no cheaper borrowing, as you can do it interest-free. However, most people get it wrong.

We'd only suggest using a credit card to borrow for a needed, planned, affordable, one-off purchase (eg, replacing a broken fridge). The real danger is using them willy-nilly to supplement your income, and that can result in a vicious cycle. Yet if you are going to borrow, 0% is cheapest, though they're not an excuse to overspend.

The top 0% card for spending is from M&S Bank , as all accepted get the full 20mths 0%, plus it pays M&S pts on purchases. The M&S link goes to our eligibility calculator on its request (to prevent calls from those rejected from clogging lines for vulnerable custs). It shows your chances of getting this card without impacting your credit score.

The next best option is from Sainsbury's Bank*, which gives up to 20mths at 0% - it too is in our  0% spending eligibility calculator. However, to be eligible - before any other criteria are considered - you need to have had a Nectar card for 6mths+ and, sadly, can't be self-employed. As it's an 'up to', you could be accepted and offered 16 or 12mths at 0%. With it, you also get Nectar pts on spending at Sainsbury's.  Full help and more deals in 0% Spending Cards.

If you get these cards, ALWAYS FOLLOW THE GOLDEN RULES:

1. Clear the debt or balance-transfer before the 0% ends, or costs soar - M&S to 19.9% & Sainsbury's Bank to 20.9% rep APRs (see APR Examples).
2. Always pay at least the monthly min and stick within your limit or you can lose the 0% and get hit with £10ish fees.
3. They're usually only cheap for spending, not cash/balance transfers.

Clearly most holiday plans are off for the moment, but if you normally travel regularly or pay for things in other currencies while in the UK, then specialist travel cards are a winner.

Usually if you pay on plastic, the card firm adds a 3%-ish 'non-sterling transaction fee'. So £100 of euros costs you £103. Yet the fee is waived by specialist cards, so you get the rate at the same near-perfect rate the bank does, smashing bureaux de change.

The top overseas credit card is from Barclaycard, which has no fees on overseas spending or withdrawals, plus you'll pay no interest on either if you repay IN FULL each month. It also pays a small 0.25% cashback on spending.

As ever if you get one of these cards, ALWAYS FOLLOW THE GOLDEN RULES:

1. Clear in IN FULL month or Barclaycard is 22.9% rep APR (see APR Examples).
2. Never miss the min monthly repayment or you'll get a £10ish late fee and a credit report black mark.
3. Never go over your credit limit or there's a £10ish fee.

Or you can open a current account with Starling Bank*  (don't worry, you don't need to switch banks) and you get a debit card which has no overseas fees or interest on spending or withdrawals (max £300/day cash). We're cheating slightly here as this isn't a credit card, but it's nevertheless a good option. Full info and more deals in  Travel Credit Cards.

PS: Need to borrow for a purchase but can't pay on card, or want to get respite from an expensive overdraft? There is a way to shift cash from a card to your bank at 0%, but to do it, you need a specialist 0% Money Transfer credit card. It's not quite as cheap as a 0% spending card, as you need to pay a fee, and the 0% periods are shorter at up to 18mths, but it's a decent option.