Credit cards are not just for spending purposes. These are also powerful tools that, when used wisely, can help you save money, manage debt, and even earn rewards.
Whether you want to reduce your interest payments, earn cash back on everyday purchases, increase your air miles for your next vacation, or avoid fees when traveling abroad, there’s a credit card to suit your needs.
In this guide, we’ll review the best options on the market for balance transfers, purchases, refunds, air miles, and travel expenses. We’ll show you how to use these cards to your advantage to ensure you get the most value while avoiding common mistakes.
A cash-back credit card rewards you with a percentage of your spending, effectively giving you back a portion of what you spent. For example, if your card offers 1% cashback and you spend £100 on shopping, you’ll earn £1 back. This refund will usually be transferred to your account or added to your statement.
Things to consider:
1. Limits: Some cards limit the total amount of cashback you can earn.
2. Introductory offers: Cashback rates may only be valid for the first few months.
3. Restrictions: Some cashback offers are limited to certain purchases or retailers.
4. Minimum spend: Some cards require you to spend a certain amount before you qualify for a refund.
Kate Steere, credit card expert at personal finance comparison site finder.comHe said: “Amex (AXP) currently has the highest introductory offer: 5% cashback (up to £125), but this is only for the first five months.
“After that, you’ll earn just 0.5% on the first £10,000 you spend per year. A strong alternative is the Lloyds (LLOY.L) Ultra Credit Card, which offers 1% cashback for 12 months with no monthly fee. Or if you prefer a welcome bonus, the Amazon (AMZN) Barclaycard comes with a £20 Amazon gift card, but the ongoing cashback rate is as low as just 0.25%.”
The 0% purchase card allows you to make new purchases without paying interest for a certain number of months. This can save you thousands compared to using a standard credit card, assuming you pay off the balance during the interest-free period.
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These cards are perfect for planned, necessary purchases. Think of them as a tool for managing big purchases like a new TV or basic home renovations.
Let’s say you take out a 0% purchase card with a 10-month interest-free period and spend £2,000 on new devices. If you repay £200 every month, you’ll clear your debt before interest starts.
However, if you still have a balance after the 10-month period, you will begin accruing interest at the standard rate; this can be as high as 27% annually.
Key points:
1. To maintain the 0% offer, make sure you pay at least the minimum amount each month.
2. Borrow only what you can comfortably repay within the 0% period.
Steere said: “The top three providers – M&S (MKS.L), Lloyds Bank (LLOY.L) and TSB – now offer 0% on purchases for up to 25 months, giving you just over two years to pay off your purchases interest-free.
“That goes a long way to spread the cost of big-ticket items like a new sofa or a 2026 vacation. Just make sure you clear the balance before the 0% period ends, otherwise what seems like a smart move could end up costing you.”
If you’re having trouble keeping up with credit card payments, a balance transfer credit card can be a lifesaver. These cards allow you to transfer your existing credit card debt to a new card with a 0% interest rate for a certain period of time, potentially saving hundreds of dollars in interest.
But to make the most of these opportunities, there are some important rules to follow:
Always pay the minimum monthly repayment. Missing a payment could cause you to lose your 0% interest deal, incur fines, and damage your credit score.
Pay off your debt within the interest-free period. To avoid paying interest after the promotional period ends, make sure you can pay off the entire balance within the 0% time frame.
Do not use the card for new purchases. The 0% deal usually only applies to transferred balances, and using the card for new expenses can result in high interest charges.
Check your credit score. The best opportunities are generally for those with strong credit scores, so it’s worth checking your score before applying.
Steere said: “TSB continues to lead the way this week by offering a market-leading 38 months interest-free offer on balance transfers. In turn, the balance transfer fee is among the highest available at 3.49%.”
“If you’d prefer a lower fee, Virgin Money’s 35-month Balance Transfer Credit Card offers around three years interest-free at a more competitive 2.95% rate. Alternatively, the Barclaycard (BARC.L) Platinum 14-month Balance Transfer Card eliminates the fee entirely – but you’ll need to make sure 14 months will give you enough time to pay off your debt.”
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“Or you can avoid the fee altogether with the Barclaycard Platinum 14-month Balance Transfer card – but you’ll need to make sure it gives you enough time to become debt-free.”
Some credit cards offer travel perks like flight upgrades and hotel stays. ·mariaphoto3 via Getty Images
If you travel frequently, a credit card for air miles can help you lower flight costs and even unlock perks like flight upgrades and hotel stays. By using these cards for your daily purchases, you can earn points that you can use on flights in your favorite airline’s loyalty program.
Read more: How can you use your Avios points for purposes other than flight tickets?
How it works:
1. Earn miles: Points are generally earned based on the amount you spend and the class of your ticket; premium tickets generally earn more points.
2. Redeem Points: You can redeem your Points to cover flight or upgrade costs, but taxes and fees may still apply.
Steere said: “When it comes to rewards cards, it’s necessary to think carefully about whether a monthly fee justifies the benefits. Take the Barclaycard Avios Plus card for example: it offers 25,000 Avios when you spend £3,000 in the first 3 months and earns 1.5 Avios per £1 you spend thereafter, but comes with a £20 monthly fee.”
“By contrast, the standard Barclaycard Avios Card has no monthly fee and offers 5,000 Avios for £1,000 spent in the first 3 months, continuing at a rate of one Avios per £1 spent. The key is to choose a card that suits your spending habits. Don’t be tempted by a generous welcome bonus if the fee-paying card won’t offer good value in the long term.”
Planning a trip abroad? A specialist travel credit card can save you money by offering near-perfect exchange rates without the usual foreign transaction fees.
Most credit and debit cards charge around 3% fees on foreign transactions; This means a £100 purchase abroad could cost you £103. On top of that, some cards add a flat fee for every foreign transaction.
Specialist travel cards waive these fees, allowing you to spend abroad at the rates charged by your bank.
Key points:
1. Avoid withdrawing cash as it often carries fees and interest.
2. Use the card to spend abroad to benefit from near-perfect exchange rates.
Steere said: “If you’re looking to achieve your 2026 travel goals, there are currently some great offers to help you avoid currency conversion fees abroad – you can even earn cash back on your spending whether at home or abroad.”
Lloyds’ (LLOY.L) new Ultra card offers 1% cashback on all spend for the first 12 months, while NatWest (NWG.L) offers 1% off eligible travel spend. Make sure you pay off your card in full each month, or the interest can quickly outweigh the cash back you earn.
Disclaimer: Opinions expressed are solely those of the author (unless otherwise stated) and are not provided, endorsed or otherwise endorsed by the listed providers. Yahoo does not earn any commission from lenders or any other third parties from the content in this series.
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