Top five reasons people choose to get a credit cardFind out what deals people are taking out
01 August 2014
Credit card providers are constantly extending the longest deals in a bid to get new customers. We examine which deals are the most popular and why.
In May, we launched the Which? Money Compare credit card comparison tables to let consumers search all available cards from the whole of the market, and choose the best deals based on quality of service as well as cost and benefits.
Since we launched, the most popular credit card deals searched are 0%-on-purchases deals, which provide interest free borrowing on new purchases for a limited period of time.
These cards offer one of the few ways to borrow interest free and at with no extra fees, so long as you make the minimum repayments each month and avoid defaulting on the card.
They have even given rise to ways of taking advantage of these deals to make money for free, known as Stoozing.
We run through the top-five reasons people are choosing a credit card based on the deals that users of our comparison table are opting to take out. We also highlight the best deal available in each category.
Five most popular reasons people choose a credit card
1. To borrow interest free on new purchases
Over the past five years the longest 0%-on-purchases deal has increased from just 12 months up to whopping 19 months.
The best deal on the market is currently offered by Tesco Bank's Clubcard Credit Card for Purchases MasterCard, offering 0% for up to 19 months.
This card also pays one Clubcard point for every £4 spent.
Which? Comparison Table - Best credit cards for 0% on purchases - compare the best deals on the market
2. To earn cash back on card spending
Some of the best deals on the market currently offer up to 5% cash back, as long as you pay off your bill in full each month to avoid paying interest these deals can help your money go further.
One of the best deals on the market is American Express's Platinum Cash back Credit card, that pays a 5% introductory rate for the first three months on spend up to £2,500.
The card then offers a standard rate of 1.25% on all other spend, but be aware it comes with a £25 annual fee.
Which? Comparison Table - Best cash back credit cards - compare the best deals on the market
3. To transfer a balance to a 0% balance transfer deal
If you've built up some debt on another credit card then transferring the balance to a good 0% balance transfer deal can give you some breathing space to pay off the deal.
During the past five years the longest deal has increased from 16 months up to 33 months, with card providers constantly competing for the longest deal.
Barclaycard currently offers the longest deal on the market at 33 months with a reduced balance transfer fee of 2.79%. If the length of deal is less important then there are much cheaper deals with lower balance transfer fees, for 6 to 12 months 0% periods.
Which? Comparison Table - Best 0% balance transfer credit cards - compare the best deals on the market
4. For spending abroad
There are handful of credit cards on the market that waive the foreign loading that most other credit and debit card providers currently charge. This fee typically amounts to around 2.75% - 2.99% of each card transaction.
Currently one of the best deals on the market is the Halifax Clarity MasterCard which waives its foreign loading fee and comes with a 12.9% representative APR on both purchases and cash withdrawals.
The card also doesn't charge a fee for withdrawing cash, but does charge interest on cash withdrawals from the day of withdrawal.
Which? Comparison Table - Best credit cards for spending abroad - compare the best deals on the market
5. To earn loyalty points
If you spend money regularly with a particular brand then it could be worth checking to see whether they offer a good reward deal on a credit card.
Most of the big high street brands offer some kind of reward deal, our credit card table allows you to compare the best deals on the market by the cash back equivalent that you can earn shopping in-store or elsewhere.
Which? Comparison Table - Best credit cards to earn retail rewards - compare the best deals on the market