Which credit card should you get?

Which credit card should you get?

Do you pay off the balance on your credit card each and every month? If so then you probably don't care what interest rate the credit card charges people who don't. You pay no interest at all as you never carry any balance over from one month to the next.

If this is the case then you should look at the reward schemes offered as this is more important to you than interest rate. However if you decide to keep a balance on your card then you should consider the interest rate.

Some cards charge an annual fee. In exchange they may offer you a reward scheme that gives you some other benefits. Sometimes the benefits are only worth having once you've spent over a certain amount on the credit card, so it's worth working this out in advance what level of reward you're likely to get if you do all your spending on that one card.

Cash Back schemes give you money back - they reward you by returning a small percentage of the amount you spend. It's free money and if you spend everything on your credit card - and then pay off the card balance with your bank account each month then this can work quite well. Especially if you consider rent and council tax can be paid by credit card in some places these days!

Look at rewards schemes which might offer you a better rate of exchange than a cash back scheme as you can quickly build up points and airmiles to exchange for trips or goods.

In the past several large companies have run reward points schemes. Some reward you more for using the card at certain stores. Some reward schemes can be as high as 2% in the UK but some are more like half a percent so it's well worth having a look at the small print.

One reward card in the last year offered extra rewards on the first few thousand spent on grocery shopping. As everyone buys food then this could be seen as a popular choice for building up extra points.

Applying for the right card is down to such a personal level of choice that we are unable to give personal advice at all.

The general rules apply:

Read everything.

Read the small print.

Is the card right for you?

Re-read the terms and conditions when the card arrives to ensure the deal is still good for you.

Look for relevant rewards and avoid terms and conditions which will make it really hard to redeem points or rewards.

How to increase your rewards on your cash back credit card

Look at all your expenditure. Look at everything that comes out of your current account? Can you pay it by credit card?

Rent, council tax, even water rates can be paid by credit card - every bill you pay, find out if you can put it on your card. The more you put through your card the more cash back you get!

When you go out with friends for a meal - pay by card and take the cash everyone puts in - make sure you put it back in the bank though else you might get into trouble!

Go through your statement each month and eliminate all the debit payments.

Then look at the cash you spend. Pubs and bars take credit cards these days, so take advantage of that and use your card!

The more you put on your card and the less you spend directly from your bank account also means you keep your money in your bank account for longer, which gives you more interest!