The following article on credit cards has been provided by Moneysupermarket.com

What is the difference between a balance transfer credit card and one that has the longest interest free period? Or one that offers a cash-back and others which give you another reward every time you use them?

The answer lies partly in the fact that all credit card issuers aim to appeal to different parts of the card market by offering them deals they think will be most attractive to individuals segments within it.

But from your perspective, to get the most from a credit card, it is vital you choose one that suits your needs and how/when you plan on repaying any amount that your borrow.

Here are some simple guidelines to help you decide on a card.

You always clear your balance in full each month

On the one hand, you won’t have to pay any interest when your bill is due! On the other, it means that 0% credit card deals are almost irrelevant to you.

Your best option is a card with no annual fee. You must then decide whether you want rewards or a cashback deal in return for your spending.

Possible rewards include:

• exclusive football rewards
• money off selected cars
• supermarket loyalty reward points
• Air Miles

You usually clear your balance in full each month

Sometimes it is hard to spend exactly the same amount each month and budget effectively that way.

In that case, your best option is a card with a low standard rate, preferably one with a reward scheme - although a combination of the two can be hard to find.

You rarely or never clear your balance in full

things can get a little bit tricky and keeping on top of your payments really is a must.

If so, it is even more important that you shop around. The best card is one with a 0% introductory purchase rate or a really low standard rate. That way you can get your finances back on an even keep before the offer period expires.

But there are three things you need to know:

• You will need to switch your account at the end of each offer period, even though it means paying a transfer fee, usually of about 3%. That way your card remains competitive.
• The so-called “payment hierarchy” we mentioned earlier works so that even if you are paying off your transferred debts at 0%, any new spending racks up interest at the (much higher) rate, unless the 0% also applies to purchases.
• If you only make minimum payments on your credit card it could take many years for your debts to be paid off.

Continue to Top mistakes people make with their cards.

You can find more information and easily compare over 300 credit cards at Moneysupermarket.com for free.