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Cheap Credit Cards
Low APR from 6.9% (APR Representative)

Our experts have selected of the best cheap credit cards available on the market. Use the tabs to compare credit cards for more specific purposes including 0% balance transfer , 0% purchases , cash back , rewards , charity and credit building (adverse credit) credit cards.

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Expert Choice Credit Cards
Balance Transfers Purchases
Credit Card Rate Duration Fee Rate Duration Representative APR Apply
Barclaycard
0.0% 31 Months 2.99% 0.0% 6 Months 18.9%Variable
More Info£25 Cash Back
0% interest on balance transfers for 31 months from account opening (2.99% handling fee applies). A fee of 3.5% will be applied, then reduced to 2.99% by a refund (terms and conditions apply). 0% interest on purchases for 6 months from account opening. Plus an additional £20 fee refund on balance transfers over £2000 (terms and conditions apply)
Representative Example: If you borrow £1200 at a purchase rate of 18.9% p.a.(variable), you will pay 18.9% APR Representative (variable).

Barclaycard | Barclaycard Platinum With BT (31 Mths)

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Halifax
0.0% 30 Months 3.0% 0.0% 6 Months 18.9%Variable
More Info£25 Cash Back
0% for up to the first 30 months on balances transferred in the first 90 days (3% fee). 0% for the first 6 months on purchases. Manage your card online using Online Banking and Mobile Banking. Most customers will be offered our best rate of 18.9% APR (variable) and 0% for the first 30 months on balances transferred in the first 90 days (3% fee applies). Other customers will receive 0% for the first 30 or 27 months with a rate of 21.9% APR (variable), or the first 24 months with a rate of 25.9% APR (variable) on balances transferred in the first 90 days (3% fee applies). All customers will get 0% for the first 6 months on purchases.
Representative Example: If you borrow £1200 at a purchase rate of 18.95% p.a.(variable), you will pay 18.9% APR Representative (variable).

Halifax | Balance Transfer Credit Card (30 Mths)

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Tesco Bank
0.0% 30 Months 2.9% 0.0% 3 Months 18.9%Variable
More Info£25 Cash Back
Earn even more Clubcard points. Collect 1 Clubcard point for every £4 you spend on your Clubcard Credit Card  (Must have available credit. 1 point awarded per £4 spent in each purchase transaction (£4 min)). Representative 18.9% APR (variable).
Representative Example: If you borrow £1200 at a purchase rate of 18.94% p.a.(variable), you will pay 18.9% APR Representative (variable).

Tesco Bank | Clubcard Credit Card (Balance Transfer)

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Barclaycard
0.0% 30 Months 2.89% 0.0% 6 Months 18.9%Variable
More Info£25 Cash Back
0% interest on balance transfers for 30 months from account opening (2.89% handling fee applies). A fee of 3.5% will be applied, then reduced to 2.89% by a refund (terms and conditions apply). 0% interest on purchases for 6 months from account opening. Plus an additional £20 fee refund on balance transfers over £2000 (terms and conditions apply)
Representative Example: If you borrow £1200 at a purchase rate of 18.9% p.a.(variable), you will pay 18.9% APR Representative (variable).

Barclaycard | Barclaycard Platinum With BT (30 Mths)

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Bank of Scotland
0.0% 28 Months 2.45% 0.0% 6 Months 17.9%Variable
More Info£25 Cash Back
0% for up to the first 28 months on balance transfers (3% fee). Refunds part of the 3% balance transfer fee so overall a 2.45% fee is payable. 0% for the first 6 months on purchases. This deal could help you save money on balances transferred within the first 90 days of opening your account (3% fee applies). Most customers will be offered our best rate of 17.9% APR (variable) and 0% for the first 28 months on balances transferred in the first 90 days (3% fee applies). Other customers will receive 0% for the first 25 months with a rate of 21.9% APR (variable), or the first 22 months with a rate of 25.9% APR (variable) on balances transferred in the first 90 days (3% fee applies). All customers will get 0% for the first 6 months on purchases. Please be aware to keep promotional rates you must pay at least the minimum payment by the due date and stay within your credit limit.
Representative Example: If you borrow £1200 at a purchase rate of 17.95% p.a.(variable), you will pay 17.9% APR Representative (variable).

Bank of Scotland | Platinum Balance Transfer Card (28 Mths)

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Halifax
0.0% 28 Months 2.45% 0.0% 6 Months 18.9%Variable
More Info£25 Cash Back
Balance transfer fee refund - refunds part of a 3% fee so overall a 2.45% fee is payable. 0% for up to the first 28 months on balances transferred in the first 90 days (3% fee). 0% for the first 6 months on purchases. Most customers will be offered our best rate of 18.9% APR (variable) and 0% for the first 28 months on balances transferred in the first 90 days (3% fee applies). Other customers will receive 0% for the first 28 or 25 months with a rate of 21.9% APR (variable), or the first 22 months with a rate of 25.9% APR (variable) on balances transferred in the first 90 days (3% fee applies). All customers will get 0% for the first 6 months on purchases. The APR and length of the promotional offer are dependent on your personal circumstances.
Representative Example: If you borrow £1200 at a purchase rate of 18.95% p.a.(variable), you will pay 18.9% APR Representative (variable).

Halifax | Balance Transfer Credit Card

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Lloyds Bank
0.0% 28 Months 2.45% 0.0% 6 Months 18.9%Variable
More Info£25 Cash Back
0% interest for up to the first 28 months on balances transferred within the first 90 days (3% fee). Balance Transfer fee refund, 3% fee so overall a 2.45% fee is payable. 0% interest on purchases for the first 6 months after your account is opened. 
Representative Example: If you borrow £1200 at a purchase rate of 18.94% p.a.(variable), you will pay 18.9% APR Representative (variable).

Lloyds Bank | Platinum Balance Transfer Card (28 Mths)

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Tesco Bank
0.0% 3 Months 2.9% 0.0% 18 Months 18.9%Variable
More Info£25 Cash Back
Earn even more Clubcard points. Collect 1 Clubcard point for every £4 you spend on your Clubcard Credit Card  (Must have available credit. 1 point awarded per £4 spent in each purchase transaction (£4 min)). Representative 16.9% APR (variable).
Representative Example: If you borrow £1200 at a purchase rate of 18.94% p.a.(variable), you will pay 18.9% APR Representative (variable).

Tesco Bank | Clubcard Credit Card (Purchase)

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Sainsburys Bank
0.0% 16 Months 3.0% 0.0% 16 Months 16.9%Variable
More Info£25 Cash Back

Sainsbury's Nectar Credit Card lets you collect even more Nectar points when you shop at Sainsbury's. Just remember to pay with your Sainsbury's Nectar Credit Card and swipe your Nectar card. Collect double Nectar points on your Sainsbury's shopping. Collect 2 Nectar points per £1 spent on Sainsbury's fuel. One Nectar point for every £5 spent on your card elsewhere. 0% balance transfers for the first 16 months from account opening (3% balance transfer fee applies). 0% on purchases for the first 16 months from account opening. No monthly or annual fee. No cash advance fee on Sainsbury's Travel Money purchases.

Representative Example: If you borrow £1200 at a purchase rate of 16.94% p.a.(variable), you will pay 16.9% APR Representative (variable).

Sainsburys Bank | Nectar Credit Card

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Tesco Bank
0.0% 12 Months 0.65% 0.0% 12 Months 18.9%Variable
More Info£25 Cash Back
Earn even more Clubcard points. Collect 1 Clubcard point for every £4 you spend on your Clubcard Credit Card  (Must have available credit. 1 point awarded per £4 spent in each purchase transaction (£4 min)). Representative 18.9% APR (variable).
Representative Example: If you borrow £1200 at a purchase rate of 18.94% p.a.(variable), you will pay 18.9% APR Representative (variable).

Tesco Bank | Clubcard Credit Card with Low BT Fee

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Bank of Scotland
0.0% 15 Months 0.7% 0.0% 6 Months 17.9%Variable
More Info£25 Cash Back
0% for the first 15 months on balance transfers (3% fee). Refunds part of the 3% balance transfer fee so overall a 0.70% fee is payable. 0% for the first 6 months on purchases. Most customers will be offered our best rate of 17.9% APR (variable). Other customers will receive rates of either 21.9% APR (variable) or 25.9% APR (variable). This offer is not available on the high street but applying online only takes a few minutes. Please be aware to keep promotional rates you must pay at least the minimum payment by the due date and stay within your credit limit. Balance transfers can be made from most credit and some store cards, excluding other Bank of Scotland products.
Representative Example: If you borrow £1200 at a purchase rate of 17.95% p.a.(variable), you will pay 17.9% APR Representative (variable).

Bank of Scotland | Platinum Balance Transfer Card (15 Mths)

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Halifax
0.0% 15 Months 0.8% 0.0% 15 Months 17.9%Variable
More Info£25 Cash Back
Balance transfer fee refund - refunds part of a 3% fee so overall a 0.8% fee is payable. 0% for up to 15 months on balance transfers (3% fee applies). A long introductory interest free period to help you manage your existing credit. 0% for up to 15 months on purchases. To help spread the cost of any new purchases. The majority of customers will be offered our best rate of 17.9% APR representative (variable) and 0% for 15 months on balance transfers and purchases. Other customers will receive a 0% introductory offer of 13 or 11 months. The APR and length of the promotional offer are dependent on your personal circumstances.
Representative Example: If you borrow £1200 at a purchase rate of 17.95% p.a.(variable), you will pay 17.9% APR Representative (variable).

Halifax | All in One Card Credit Card

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Barclaycard
0.0% 28 Months 2.44% 0.0% 6 Months 18.9%Variable
More Info£25 Cash Back
0% interest on balance transfers for 28 months from account opening (2.44% handling fee applies). A fee of 3.5% will be applied, then reduced to 2.44% by a refund (terms and conditions apply). 0% interest on purchases for 6 months from account opening.
Representative Example: If you borrow £1200 at a purchase rate of 18.9% p.a.(variable), you will pay 18.9% APR Representative (variable).

Barclaycard | Platinum With Balance Transfer (28 Mths)

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American Express
N/A N/A N/A N/A N/A 19.9%Variable
More Info£25 Cash Back
5% cashback during your first three months on up to £2,000 in purchases. After the first three months you’ll earn up to 1.25% cashback, depending on how much you spend on the Card: Spend £0 to £3,500 and receive 0.5% cashback on that spend. Spend between £3,500 and £7,500, receive 1% cashback on that spend. Spend over £7,501 and receive 1.25% cashback on that spend. As long as you spend a minimum of £3,000 in a year, almost every full pound you spend on your Card qualifies for cashback.
Representative Example: If you borrow £1200 at a purchase rate of 19.9% p.a.(variable), you will pay 19.9% APR Representative (variable).

American Express | Platinum Cashback Everyday Card

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Lloyds Bank
0.0% 24 Months 1.5% 0.0% 3 Months 17.9%Variable
More Info£25 Cash Back
0% interest on balance transfers for 24 months from account opening. Effective 1.5% Balance Transfer Fee (initially 3% will be taken and then 50% of this refunded within 60 days to equal an effective 1.5% fee). 0% interest on purchases for 3 months from account opening.

Representative Example: If you borrow £1200 at a purchase rate of 17.95% p.a.(variable), you will pay 17.9% APR Representative (variable).

Lloyds Bank | Platinum Balance Transfer Card (24 Mths)

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Halifax
0.0% 24 Months 1.5% 0.0% 3 Months 18.9%Variable
More Info£25 Cash Back
0% for up to the first 24 months on balances transferred in the first 90 days (3% fee). Minimum £100 balance transfer. Most customers will get 0% for the first 24 months on balance transfers, at our best rate of 18.9% APR (variable). Others will get 0% for the first 21 or 18 months at a rate of 21.9% APR (variable), or the first 15 months at a rate of 25.9% APR (variable). Refunds part of the initial 3% balance transfer fee so overall a 1.50% fee is payable. You'll initially be charged a 3% fee for each balance transfer. We'll then refund 1.50% of each balance transferred to us within 90 days, so overall you will pay a fee of just 1.50%. 0% for the first 3 months on purchases. Your purchase interest rate will be the same as the balance transfer interest rate.
Representative Example: If you borrow £1200 at a purchase rate of 18.95% p.a.(variable), you will pay 18.9% APR Representative (variable).

Halifax | Balance Transfer Credit Card (24 Mths)

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Bank of Scotland
0.0% 24 Months 1.5% 0.0% 3 Months 17.9%Variable
More Info£25 Cash Back
Balance transfer fee refund - refunds part of a 3% fee so overall a 1.5% fee is payable. 0% for the first 24 months on balances transferred in the first 90 days (3% fee). 0% for the first 3 months on purchases. Most customers will be offered our best rate of 17.9% APR (variable) and 0% for the first 24 months on balances transferred in the first 90 days (3% fee applies). Other customers will receive 0% for the first 21 months with a rate of 21.9% APR (variable), or the first 18 months with a rate of 25.9% APR (variable) on balances transferred in the first 90 days (3% fee applies). All customers will get 0% for the first 3 months on purchases.
Representative Example: If you borrow £1200 at a purchase rate of 17.95% p.a.(variable), you will pay 17.9% APR Representative (variable).

Bank of Scotland | Platinum Balance Transfer Card

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Sainsburys Bank
0.0% 12 Months 3.0% 0.0% 12 Months 16.9%Variable
More Info£25 Cash Back
0% on balance transfers for the first 12 months from account opening (3% balance transfer fee applies, refunded in Nectar points). 0% on purchases for the first 12 months from account opening. Collect double Nectar points on your Sainsbury's shopping. Collect 2 Nectar points per £1 spent on Sainsbury's fuel (plus 1 point per litre when you also swipe your Nectar card). One Nectar point for every £5 spent on your card elsewhere.
Representative Example: If you borrow £1200 at a purchase rate of 16.94% p.a.(variable), you will pay 16.9% APR Representative (variable).

Sainsburys Bank | Nectar Credit Card (Nectar Refund)

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Barclaycard
0.0% 18 Months 2.49% 0.0% 14 Months 18.9%Variable
More Info£25 Cash Back
0% interest for 14 months on purchases and 0% for 18 months on balance transfers. A fee of 2.9% will be applied, then reduced to 2.49% by a refund (terms and conditions apply).
Representative Example: If you borrow £1200 at a purchase rate of 18.9% p.a.(variable), you will pay 18.9% APR Representative (variable).

Barclaycard | Platinum Purchase

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Post Office Ltd
0.0% 18 Months 2.98% 0.0% 3 Months 17.8%Variable
More Info£25 Cash Back
Post Office® Credit Card. The credit card for everyday use home and abroad. 17.8% APR Representative (variable). The Post Office Credit Card offers you a range of benefits whether you use it at home or abroad. 17.8% APR Representative (variable).
Representative Example: If you borrow £1200 at a purchase rate of 17.8% p.a.(variable), you will pay 17.8% APR Representative (variable).

Post Office Ltd | Platinum Card

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Barclaycard
0.0% 18 Months 2.9% 0.0% 3 Months 24.9%Variable
More Info£25 Cash Back
0% interest on balance transfers for 18 months from account opening (2.9% handling fee applies). 0% interest on purchases for 3 months from account opening.
Representative Example: If you borrow £1200 at a purchase rate of 24.9% p.a.(variable), you will pay 24.9% APR Representative (variable).

Barclaycard | Platinum With Balance Transfer (18 Mths)

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Barclaycard
0.0% 16 Months 1.5% 0.0% 6 Months 18.9%Variable
More Info£25 Cash Back
0% interest on balance transfers for 16 months from account opening (1.5% handling fee applies). A fee of 1.6% will be applied, then reduced to 1.5% by a refund (terms and conditions apply).
Representative Example: If you borrow £1200 at a purchase rate of 18.9% p.a.(variable), you will pay 18.9% APR Representative (variable).

Barclaycard | Platinum Low Balance Transfer Fee

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Lloyds Bank
0.0% 13 Months 3.0% 0.0% 13 Months 22.7%Variable
More Info£25 Cash Back
Get a choice of rewards for your everyday spend. 0% interest for the first 13 months on purchases and on balances transferred within the first 90 days (3% fee applies). Collect 10 Choice points for every £1 of eligible spend on the Choice Rewards American Express®. Whether it’s cashback, shopping vouchers, magazines subscriptions or even travel rewards through Avios, you’ll get to choose the reward you want, when you want. Get there quicker – with double Choice points on eligible spend¹ for the first 6 months on your American Express Card.
Representative Example: If you borrow £1200 at a purchase rate of 17.95% p.a.(variable), with an £24 annual fee, you will pay 22.7% APR Representative (variable).

Lloyds Bank | Choice Rewards Credit Card (MCard)

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Barclaycard
0.0% 9 Months 2.9% N/A N/A 18.9%Variable
More Info£25 Cash Back

An amazing 10,500 Freedom bonus points worth £30 when you spend £500 or more in the first three months of account opening (terms and conditions apply). Rewards range from the high street, online favourites, places to eat and drink, to top entertainment and days out. Earn points wherever you shop, with double Freedom points on your UK supermarket, petrol station and all Transport for London (TfL) spend, plus triple points at selected Freedom partners (terms and conditions apply). 0% interest on balance transfers for 9 months from account opening (2.9% handling fee applies).

Representative Example: If you borrow £1200 at a purchase rate of 18.9% p.a.(variable), you will pay 18.9% APR Representative (variable).

Barclaycard | Freedom Rewards

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Sainsburys Bank
N/A N/A N/A N/A N/A 6.9%Variable
More Info£25 Cash Back
Sainsbury's Nectar Low Rate Credit Card lets you collect even more Nectar points when you shop at Sainsbury's. Just remember to pay with your Sainsbury's Nectar Credit Card and swipe your Nectar card.Collect double Nectar points on your Sainsbury's shopping. Collect 2 Nectar points per £1 spent on Sainsbury's fuel. One Nectar point for every £5 spent on your card elsewhere. No monthly or annual fee. No cash advance fee on Sainsbury's Travel Money purchases.
Representative Example: If you borrow £1200 at a purchase rate of 6.95% p.a.(variable), you will pay 6.9% APR Representative (variable).

Sainsburys Bank | Nectar Low Rate Credit Card

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NatWest
N/A N/A N/A N/A N/A 11.1%Variable
More Info£25 Cash Back
No confusing introductory offers. A simple, low rate for balance transfers and purchases – 6.9% p.a. (variable). No balance transfer fees – just one annual fee of £24. Representative 11.1% APR (variable).
Representative Example: If you borrow £1200 at a purchase rate of 6.9% p.a.(variable), with an £24 annual fee, you will pay 11.1% APR Representative (variable).

NatWest | Clear Rate Platinum Credit Card

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Royal Bank of Scotland
N/A N/A N/A N/A N/A 11.1%Variable
More Info£25 Cash Back
No confusing introductory offers. A simple, low rate for balance transfers and purchases – 6.9% p.a. (variable). No balance transfer fees – just one annual fee of £24. Representative 11.1% APR (variable).
Representative Example: If you borrow £1200 at a purchase rate of 6.9% p.a.(variable), with an £24 annual fee, you will pay 11.1% APR Representative (variable).

Royal Bank of Scotland | Clear Rate Platinum Credit Card

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Lloyds Bank
0.0% 13 Months 1.0% 0.0% 13 Months 17.9%Variable
More Info£25 Cash Back

0% interest for the first 13 months on balances transferred within the first 90 days (1% fee - 3% will be taken initially but an automatic refund will refund 2% of this fee within 60 days of the balance transfer completion). 0% interest for the first 13 months on purchases. Representative 17.9% APR (variable).

Representative Example: If you borrow £1200 at a purchase rate of 17.95% p.a.(variable), you will pay 17.9% APR Representative (variable).

Lloyds Bank | Platinum Purchase Card

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Bank of Scotland
0.0% 13 Months 1.0% 0.0% 13 Months 17.9%Variable
More Info£25 Cash Back
Are you looking for 0% on purchases as well as on your balance transfer? Then the Bank of Scotland Platinum Purchase Card could be right for you. 0% for the first 13 months on purchases. 0% for the first 13 months on balances transferred in the first 90 days (3% fee). Balance transfer fee refund - refunds part of a 3% fee so overall a 1% fee is payable. You'll get 0% for the first 13 months on balances transferred in the first 90 days (a fee of 3% applies for each balance transfer). You will also get 0% for the first 13 months on purchases. Your personal APR for purchases will be either 17.9% APR (variable), 21.9% APR (variable) or 23.9% APR (variable). The interest rate for balance transfers will be the same as for purchases.
Representative Example: If you borrow £1200 at a purchase rate of 17.95% p.a.(variable), you will pay 17.9% APR Representative (variable).

Bank of Scotland | Platinum Purchase Card

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AA
0.0% 12 Months 3.0% 0.0% 10 Months 16.9%Variable
More Info£25 Cash Back
Offers 0% on card purchases for 10 months and 0% on balance transfers for 12 months (3% fee). Plus earn reward points every time you spend and double points on fuel. Redeem your points on high street shopping vouchers, cash back or AA products. Example - spend £50 a week on fuel and £100 a week on other purchases a month and earn over £25 cash back in a year or over £50 worth of AA products such as breakdown cover. You must be 21 years old, employed, and earn over £20,000 per year with no recent credit defaults.
Representative Example: If you borrow £1200 at a purchase rate of 16.9% p.a.(variable), you will pay 16.9% APR Representative (variable).

AA | Rewards Credit Card

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Barclaycard
N/A N/A N/A 0.0% 5 Months 34.9%Variable
More Info£25 Cash Back

Can help to build your credit rating. Suitable if your financial situation has been improving. You must be over 18 years of age, earn over £3,000 a year and not be unemployed. You must not have been made bankrupt in the last six years – including having an Individual Voluntary Arrangement or Debt Relief Order. You must not have more than one County Court Judgement or recently missed a bill payment. Manageable credit limits from £250 - £1,000. Great for: being able to reduce your interest rate by always paying on time and staying within your credit limit. 0% interest on purchases for 5 months from account opening.

Limited Offer
Representative Example: If you borrow £1200 at a purchase rate of 34.9% p.a.(variable), you will pay 34.9% APR Representative (variable).

Barclaycard | Initial Credit Card

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American Express
N/A N/A N/A N/A N/A 18.7%Variable
More Info£25 Cash Back
Enjoy a generous 5% cashback on virtually everything you buy for 3 months, on up to £2,500 in purchases. After the introductory period you’ll receive 1.25% cashback on virtually everything you buy – not just for a limited period. 2.5% cashback in the first month of every year if you spend more than £10,000 in your previous 12 months.
Representative Example: If you borrow £1200 at a purchase rate of 14.0% p.a.(variable), with an £25 annual fee, you will pay 18.7% APR Representative (variable).

American Express | Platinum Cashback Credit Card

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Nectar
N/A N/A N/A N/A N/A 25.0%Variable
More Info£25 Cash Back
20,000 Nectar bonus points welcome offer – worth at least £100 to spend with Nectar partners (when Cardmembers spend £2,000 in their first 3 months). Collect points up to twice as fast at Nectar partners when you swipe your loyalty card and pay with your Nectar Credit Card.
Representative Example: If you borrow £1200 at a purchase rate of 19.9% p.a.(variable), with an £25 annual fee, you will pay 25.0% APR Representative (variable).

Nectar | Credit Card

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Lloyds Bank
4.9% 12 Months 3.0% 0.0% 6 Months 11.9%Variable
More Info£25 Cash Back
0% interest on purchases for 6 months. 4.9% p.a. interest for 12 months on balance transfers (3% fee) – if you spend £100 or more in the first 3 months. 11.9% APR representative variable.
Representative Example: If you borrow £1200 at a purchase rate of 11.95% p.a.(variable), you will pay 11.9% APR Representative (variable).

Lloyds Bank | Advance Credit Card

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TSB
0.0% 15 Months 0.8% 0.0% 3 Months 17.9%Variable
More Info£25 Cash Back
0% interest for up to 15 months on balances transferred within the first 90 days (3% fee). Balance Transfer fee refund - refunds part of a 3% fee so overall a 0.8% fee is payable. 0% on purchases for the first 3 months. Representative 17.9% APR (variable). 
Representative Example: If you borrow £1200 at a purchase rate of 17.95% p.a.(variable), you will pay 17.9% APR Representative (variable).

TSB | Platinum Balance Transfer Card

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MoneyExpert Ltd is a Credit Intermediary and receives commission payments for all credit cards referrals made on our website. This does not apply to Tesco Bank, NatWest and Royal Bank of Scotland. The rates displayed in this table are updated on a daily basis.

Compare Credit Cards

Credit cards can offer a quick, easy and straightforward way to pay for things. They can be used as a handy alternative to cash or cheques and can also be used to make purchases at a distance, whether online or over the phone. They also provide a convenient way to borrow money but should always be used responsibly.

What are credit cards?

Credit cards are small plastic cards that allow you to access a pre-arranged line of credit. In essence you borrow money to make a payment on your credit card. There will be a limit, known as your credit limit, on the amount you are allowed to borrow on your credit card. The majority of cards have interest free periods available on purchases. If you pay the balance in full each month, you will usually pay no interest on the account.

What are the benefits?

There are many benefits to using a credit card. These include:

Convenience

Most people find it more convenient to carry a credit card rather than large amounts of cash or a chequebook. They are also easy to use online, over the phone or by mail order.

Purchase protection

Section 75 of the 1974 Consumer Credit Act gives you certain protections if you make a purchase between £100 and £30,000 on a credit card. If goods are faulty or do not turn up – perhaps because the suppliers have gone bust – you can claim the costs back from your credit card provider. For purchases under £100 you may be able to make a chargeback claim. Unlike the Consumer Credit Act, chargeback is not a legal obligation on the part of your card provider, but it is part of a voluntary scheme, which participating banks and credit card providers subscribe to.

Fraud protection

So long as you have taken reasonable precautions (such as protecting your PIN), you will not usually be liable for any fraudulent transactions made on your credit card account.

Free credit

As long as you pay back your balance in full each month you will not usually have to pay any interest or charges on your account. Some cards do have set annual fees however and if you use your credit card to withdraw cash from an ATM (known as a 'cash advance') you will usually be charged interest from the day you make the withdrawal until you have paid it off.

Bonuses and rewards

Many credit cards offer additional benefits such as Air Miles, points-based reward schemes and cashback. Some premium cards may also offer extras such as limited travel insurance and even breakdown cover.

Worldwide payments

Credit cards are recognised and accepted all around the world. This means you can use them to pay for goods and services when buying from abroad online or in person if you are on holiday or otherwise travelling overseas.

What are the disadvantages?

One of the chief advantages of a credit card – the fact that it allows you easy access to a pre-arranged line of credit – can also be the main disadvantage. When used sensibly, credit cards can provide a cheap (or free) means of short-term borrowing. If you do not or cannot pay off your balance however, the costs can soon add up. Some people find themselves building up debts they cannot easily manage on their credit cards.

Credit cards are not generally designed for long-term borrowing. Even cheap credit cards with relatively low interest rates can cost more than other sources of credit such as personal loans over a longer time period. The rates for cash advances are generally very expensive.

How do I choose the best card?

There are various things to consider when you compare credit cards. The interest rate that you pay on your balance can be very important but it also depends on your personal circumstances and how you use your card. If you generally have some outstanding balance each month then cheap credit cards with relatively low interest rates may be the best option.

If you pay off your balance in full each month and take advantage of the interest-free period, the interest rate may actually be far less important than other factors. You should be aware that situations can change however, and that you may encounter unexpected expenses. You may start off intending to pay off your balance in full every month but there may be times when this doesn't happen for one reason or another. If this is the case, your interest rate will affect the amount of interest that is applied to any outstanding balance.

Cards with rewards schemes can also be particularly beneficial for customers who tend to pay off their balances in full. These cards will often tend to have higher interest rates and so the value of any rewards or the amount of cashback earned has to be set against the extra interest you will have to pay if you do have outstanding balances each month.

As well as the regular monthly interest-free period, many cards will have introductory offers of low interest rates on purchases that last for a set period of time. If, for example, you had a 0% introductory offer for 6 months you would not pay any interest on purchases made on the card in that time. If you have not paid off the balance by the end of the introductory offer period however, the standard interest rate would apply to any money still owed.

The same goes for balance transfers. Many cards will allow you to transfer a balance from another existing credit card account – essentially the new card takes on the debt that you owe the other provider. There will often be an introductory or promotional offer on the new card that means you will pay a lower or zero interest rate for a set time. At the end of this time it would again revert to the standard interest rate if any balance remains.

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