Credit cards are something that almost every adult uses in their day-to-day lives, whether that's to pay off a mortgage, keep themselves afloat between jobs, or treat themselves to that item they've been wanting for a while.
While necessary for many, a credit card can be difficult to get, not least because there are so many credit card providers out there.
Assuming you possess a decent credit rating, you still have to weigh up all your options before you finally decide on one.
There are hundreds of credit card companies in the UK, so how can you be expected to choose the best one? That's where we come in.
In this article, you'll find all the information on credit cards and credit card providers, with a comprehensive list of the top British credit card companies, as well as information on what to look out for when choosing a credit card.
| Provider | Score | Details |
|---|---|---|
| Halifax | ★★★★★ | Learn more |
| American Express | ★★★★★ | Learn more |
| HSBC | ★★★★★ | Learn more |
| NatWest | ★★★★★ | Learn more |
| Vanquis Bank | ★★★★★ | Learn more |
| Lloyds Bank | ★★★★★ | Learn more |
| Tesco Bank | ★★★★★ | Learn more |
| British Airways | ★★★★★ | Learn more |
| M&S Bank | ★★★★★ | Learn more |
| Virgin Money | ★★★★★ | Learn more |
| Sainsbury's Bank | ★★★★★ | Learn more |
What is a Credit Card?
First things first, let's go over what a credit card actually does.
It's essentially a tool to help you manage your finances better by lending you money (up to a certain predetermined credit limit) for you to pay back later.
The amount you pay back is often larger than the initial sum you borrowed due to interest rates, which vary depending on the credit card company you're with. Always check these before you open a credit card account.
There are several different types of credit cards, such as the money transfer credit card and the balance transfer credit card. These provide financial assistance for short-term cash flow problems and allow you greater control over your existing debt.
Other cards may come with extra bonuses. Some UK credit card companies offer things like 0% and interest-free cards, cashback, company discounts, and other credit card deals.
Under Section 75 of the Consumer Credit Act, you are legally protected if you use a credit card to purchase goods or services that are faulty, misrepresented, or falsely advertised. This gives you reassurance in your spending and is a great benefit of using a credit card, particularly in online transactions with unfamiliar traders.
What to Consider When Choosing a Credit Card Provider
Picking a credit card isn't as simple as siding with the first bank that floats an offer your way. There are so many factors to consider, since this decision plays a huge role in your financial standings.
While many people simply choose to stick with the bank they already have a debit card account with, it can be worth switching providers to fully take advantage of offers and rewards.
Before you settle on a credit card provider, it's worth considering a few things. Check the reviews on the bank, for instance, and ensure the interest rates are affordable and realistic. Your credit history and your specific needs will also factor into your decision.
Below, you'll find a number of things to look out for when choosing a credit card. Different credit card providers offer different features, rates, and allowances, so make sure you do your research before settling on a company.
Customer Satisfaction Scores
First off, always check the reviews of your selected credit card company. Customer satisfaction scores are important in determining a number of other factors, such as the level of support you'll get and how easy it is to manage your account opening. If a company has low satisfaction rates, opening an account with them will probably be more hassle than it's worth.
Customer service is steadily becoming more of a priority among financial institutions, as consumers place higher value on it. Credit card providers should offer substantial support for things like balance transfers and credit limits, otherwise it can be a daunting process for you. That's why it's important to consider a company's satisfaction scores.
Interest Rates
Another factor that will influence your final decision is the interest rate. The higher the interest rate, the more you'll have to pay back at the end. Low interest rates are ideal, but be wary of credit card providers who charge oddly low rates — they may charge you a hefty annual fee to use the card.
Sometimes, British credit card companies will offer an interest-free period when you open an account with them. It's worth having a quick look around to find out which providers are offering which discounts and rewards, as you might end up saving yourself some money.
Credit History
Your credit rating and credit record will also factor into which provider you go with. A poor credit history will limit your choice of credit cards, as many of the best ones require a fairly good credit score. That said, you can still get a credit card even with a low credit score.
Pre-approved credit cards work to build your credit score, as your personal details will only be used for a soft credit search without impacting your credit rating. Alternatively, you could opt for a specific credit builder card that will help you improve your credit score.
Ease of Account Management
Tracking your credit card usage is an important part of managing your finances and ensuring you don't end up in overwhelming debt. Credit card issuers should provide you with accessible ways to monitor your credit card balance and ensure you don't go beyond your credit limit.
Online and mobile applications that let you access your account are often available, but certain providers won't offer them both. If you're the type of person who likes to keep a diligent eye on your finances, consider the services that the credit card companies provide in terms of account management before making a commitment.
Other Individual Requirements
Credit cards are more versatile than you think, so it's worth comparing them to see which ones are best suited to you and your specific needs. If you want a credit card for expensive purchases, for instance, it's worth finding out about the credit limit on the card.
Similarly, if you travel often for business or pleasure, you may require a credit card with a good exchange rate with foreign currency. Also, you should consider the charges for using your credit card abroad and pick a provider that aligns with your travel-oriented lifestyle.
Top Credit Card Providers in the UK
There are many companies that offer credit cards that range from banks to supermarkets to online retailers.
If you're a UK citizen, you'll have access to a pool of British credit card companies that all offer similar but different things. Choosing the right one for you can be difficult and daunting.
That's why we've compiled this list of the major credit card providers in the UK to help you whittle your selection down to the very best ones. Use the criteria listed above to help you determine which company is best suited to you and your requirements.
Banks and Financial Institutions
For the most part, people turn to banks and traditional financial institutions for anything money-related. Banks that have stood the test of time have solidified themselves as reputable organisations when it comes to financial dealings.
In other words, a person is more likely to turn to a bank to open an account than a company like British Airways, who offer credit cards but as a secondary venture.
The list below is not exhaustive and there are plenty of other organisations out there that offer credit cards. However, the financial institutions below offer the best rates, deals, and general service overall.
Halifax
An ideal bank for both debit and credit cards, Halifax is a trusted credit card provider. They're consistently ranked high on customer satisfaction scores, as they offer a friendly and comprehensive support service.
Their credit cards are solid choices if you've got an average or above-average credit score. And if you're someone who finds themselves abroad often, the Halifax Clarity card has no transaction fees when you use it in another country. That's why a lot of customers rate Halifax's credit cards so highly, and why many travellers pick them to bank with.
American Express
Amex offers quality credit cards that carry a great reputation. With highly reviewed customer service, great account management capabilities, and valuable cashback options, an American Express credit card is a solid choice. Customers benefit from the ability to monitor their finances both online and on a mobile device.
They're ideal for travellers too, since they're accepted at many establishments around the world. The representative APR is comparatively low and there is no annual fee for using the card, making American Express a reliable credit card provider.
HSBC
HSBC is a well-established bank in the UK and its credit cards reflect this. There's a whole range of them available, so you can be sure to find one that suits your needs. For instance, small businesses can benefit from a variety of offers through the HSBC Platinum credit card.
HSBC offers particularly attractive credit cards for students looking to lay the foundations for a good credit history.
There's a manageably low credit limit, no annual fees, and a personalised cashback offer. What's more, it's ideal if you're planning to study abroad for a year, since the HSBC credit card is accepted in most places around the world.
NatWest
Another established bank in the UK, NatWest provides good quality online customer service and a lot of in-person branches around the country.
This means that when you have an issue with your credit card account, there are multiple ways you can get help. The mobile app is easy to use and very user-friendly.
They offer a big interest-free period on certain credit cards, which lets you spread out the purchases you make within the first three months of your account over 2 years.
However, it's not overly suitable for people with a low credit score, as your representative APR will increase the poorer your credit rating.
Vanquis Bank
Vanquis is a lesser-known bank, but one that's particularly good if you have a bad credit history. Their Chrome credit card offers a manageable interest rate for those looking to build their credit score — ideal if you're just starting off in the world of credit cards.
There are other perks to this card too, such as no annual fees and the possibility of an interest-free period on purchase transactions.
However, you'll only get this when you've repaid your whole balance on two or more consecutive statements.
Lloyds Bank
Lloyds Bank have become a staple of the high street across the UK and their credit cards reflect this. They have a variety of credit cards suitable for the general public, students, and businesses.
Their Platinum credit card has a high credit limit, which invites people to make more expensive purchases using their credit card. While not designed for those with a poor credit history, it's still a useful card for building your credit score.
Supermarkets and Commercial Organisations
Large organisations often turn to financial services as a way to expand their business. Many commercial traders and supermarkets now offer credit cards that typically come with in-store perks. If you're someone who shops a lot at a particular place, it might be worth getting a credit card directly from the company.
Check out the top providers below.
Tesco Bank
Venturing into finance, Tesco now offers a variety of credit cards that are ideal for the general public. If, like many people, you regularly shop there, you could earn Tesco Clubcard points and other in-store benefits by using a Tesco credit card. There's a 12-month interest free period on the All Round credit card and a manageable credit limit.
Tesco Bank also has a Foundation credit card, which is tailored to those with a low credit score or for those looking to improve their credit rating. It has a relatively low credit limit, but rewards responsible users with Clubcard points for use in Tesco stores around the country.
British Airways
Another company who have stepped into finance as a secondary venture, British Airways currently offer two types of credit cards. They're linked with American Express and offer Avios points and air miles to responsible users.
They don't offer the most competitive APR, but they're perfect for frequent flyers as they also come with a host of other airport-related rewards, such as access to upgrades and lounges.
M&S Bank
M&S offer credit cards that bring useful benefits if you frequently shop with them. Their Shopping Plus card lets you earn points when you make purchases at M&S, which are also interest-free for 18 months.
There are no annual fees and balance transfers are interest-free for 15 months, although they do require a small fee. This is a great card for regular M&S shoppers, but if you're not there are better credit cards out there.
Virgin Money
While not everyone's first thought for credit cards, Virgin Money can offer a more attractive alternative to many banks and supermarkets. For instance, it allows one of the longest balance transfer periods out there at 34 months with an APR of 21.9%.
Customers also rate the company highly because of the easy application process and useful mobile app for improved account management.
Sainsbury's Bank
Sainsbury's offers comparatively average credit cards that are mostly tailored to Sainsbury's shoppers. Seeing as their main USP is that you can earn Nectar Points when you use your card, those that tend to shop elsewhere may benefit from a different credit card provider.
That said, their application process is well reviewed by customers, and their low interest rate credit card is ideal for those looking to build their credit scores. This card comes with the Nectar Points benefit, too, just like their other ones.
Final Thoughts: Which Credit Card is Best?
Overall, it's easy to see how choosing a credit card can be daunting. With so many providers out there, it's hard to stop thinking that you could be missing out on a great deal that you just haven't found yet. Truthfully, though, most companies offer similar deals, similar APR, and similar interest rates.
It's best to come up with a list of priorities for yourself and assess each credit card based on your own criteria. Of course, it's worth taking into account other customer reviews, but your individual needs are what count at the end of the day. With that in mind, you should be able to narrow your choice down and open a credit card account fairly easily.
Related Guides:
