Credit Cards

Types of Credit Card

There are several different types of credit cards. Before you apply, consider how you’re most likely to use your credit card – and how you expect to pay the bill.

Balance transfer credit cards

These cards usually offer a 0% interest period when you transfer your balance from another credit card. This can save you money on interest, and help you to pay off your debt quicker. 

0% purchase credit cards

With one of these cards you won’t pay any interest for a set period – so it can be a cost-effective way to spread the cost of an expensive purchase. However, you’ll usually need a good credit score to qualify for the longest 0% offers. 

Money transfer credit cards

You can transfer money into your bank account from a money transfer credit card, sometimes with a 0% interest introductory period. Often used to clear an overdraft, they can be a cost-effective alternative to a loan. 

Credit builder cards

Designed for people with a poor credit score, or little credit history. These cards can help you build or repair your credit rating – but tend to offer lower credit limits and higher interest rates. 

Cashback Credit Cards

You can earn cashback as you spend with these credit cards – but these rewards could be cancelled out by interest if you don’t repay your balance in full each month. 

Rewards Credit Cards

These cards reward you with points each time you spend, which can then be redeemed with a selection of retailers or exchanged for rewards such as vouchers, flights and upgrades or car hire. However, these rewards could be cancelled out by interest if you don’t repay your balance in full each month.

Cashback credit cards

You can earn cashback as you spend with these credit cards – but these rewards could be cancelled out by interest if you don’t repay your balance in full each month. 

Rewards credit cards

These cards reward you with points each time you spend, which can then be redeemed with a selection of retailers or exchanged for rewards such as vouchers, flights and upgrades or car hire. However, these rewards could be cancelled out by interest if you don’t repay your balance in full each month.

Travel credit cards

These cards are designed for use when you’re travelling overseas, and come with perks such as preferential exchange rates and fee-free spending. However, you should aim to clear the balance as soon as possible, otherwise, interest charges will quickly exceed any savings you’ve made. 

Prepaid credit cards

An alternative to credit or debit cards. You top these cards up before you use them, so there’s no need to pass a credit check. They can also help you to budget as you can only spend what’s on the card. 

Student credit cards

These cards are available to students who often have a low income and minimal credit history. They tend to have a lower credit limit and higher APR.