Choosing the right credit card

Balance transfer credit cards

Balance transfer cards let you move your current credit card balances to a new card. They usually offer a lower interest rate or even 0% for a limited time. If managed carefully, a balance transfer card can help reduce the overall cost of your debt.

When looking at balance transfer cards you should consider that:

• a balance transfer fee of between 3% and 5% typically applies
• the 0% rate is temporary
• after the 0% rate ends the standard APR applies
• missing a payment may result in losing the promotional rate

Here at The Co-operative Bank, we offer our own 0% balance transfer credit card.

Cashback credit cards

Cashback cards give you a percentage of your spending back as a reward. They can be a good choice if you want to earn rewards on everyday spending.

When looking at cashback cards you should consider that:

• introductory offers usually drop after a set period
• typical ongoing cashback rates are around 0.25% to 2%
• you may lose rewards if you miss payments

Here at The Co-operative Bank, we offer our own cashback credit card for Co-operative Members.

Reward credit cards

Reward cards offer points or benefits linked to your spending. This can be things like retail vouchers or airline miles.

When looking at reward cards you should consider that:

• some cards charge annual fees
• missing payments could affect your eligibility for rewards

0% purchase credit cards

0% purchase cards let you make purchases without paying interest for an introductory period. They can be a good choice if you want to spread the cost of a large purchase.

When looking at 0% purchase cards you should consider that:

• the 0% period is limited to a fixed number of months
• after the 0% period ends the standard APR applies and this may be higher than other cards
• to avoid paying any interest you need to repay the balance before the offer period ends

Overseas (travel) credit cards

Overseas (travel) credit cards are designed for spending abroad and often don’t charge foreign transaction fees. They can be a good choice if you travel internationally and want to avoid foreign usage fees.

When looking at overseas (travel) cards you should consider that:

• you may still be charged interest or fees on cash withdrawals abroad
• exchange rates can vary and may include a margin
• interest rates on these cards can be higher than standard cards

Low rate credit cards

Low rate cards offer a lower ongoing APR compared to standard credit cards. They can be a good choice if you expect to carry a balance over time and want to reduce interest costs.

When looking at low rate cards you should consider that:

• the rate you’re offered depends on your credit profile
• not everyone will qualify for the lowest advertised APR
• these cards may not have introductory 0% offers

Fixed rate credit cards

Fixed rate credit cards offer an interest rate that stays the same for a set period. These can be a a good choice if you want predictability in how much interest you’ll pay.

When looking at fixed rate cards you should consider that:

• the fixed rate only applies for a defined period
• terms may allow changes in certain circumstances
• after the fixed rate period ends a different rate will apply

Here at The Co-operative Bank, we offer our own fixed rate credit card.