Types of credit cards
With so many different card types, finding the one that fits your needs can make a huge difference. We explore the different types of credit cards in the UK, helping you pick the right one for you.
Whether you’re looking to build credit, manage existing debt, or earn rewards, there’s a credit card for you.
Estimated read time: 6 mins
Credit builder card
Credit builder cards help you build or improve your credit score when used responsibly. These cards often come with lower credit limits and higher interest rates than standard credit cards.
This type of credit card suits people with little or no credit history. This includes young adults, students, and those who have had past debt issues. Other benefits include:
- A credit limit tailored to your needs that can grow over time with responsible use.
- No annual fee. Usually, there are no annual sign-up fees. You only pay for cash withdrawals, late payments, balance transfers, and using your card abroad.
- Can help improve your chances of getting lower interest rates. Paying the minimum amount on a regular basis could help you get lower interest rates in the future. It also shows lenders that you manage credit responsibly.
Balance transfer card
The balance transfer card lets you move debt from one or more credit cards to a new card. It often offers a low-interest or 0% introductory rate, and can help you:
- Save interest by moving balances from high-interest credit cards to a low-interest or interest-free card. This can help you pay your debt faster, as long as you make regular, on-time payments.
- Make payments easier by combining several credit card balances onto one card. This way, you’ll have one payment to manage. Helping you manage your debt and lower the risk of missed payments.
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Our Credit Risk expert has your back
Our expert says: “Getting a credit card is a big step, so it’s worth taking a moment to think about what’s right for you. Ask yourself, can I manage the repayments comfortably, and will this card help me build my credit over time?
“At Vanquis, we’re here for customers who are starting out or rebuilding their credit, so choosing a card that supports your goals and gives you the tools to stay in control is key.”
Matt Oliver, Lead Credit Risk Analyst at Vanquis.
Purchase card
A purchase card is for people who want to buy now and pay later. It often has interest-free periods for new purchases.
This type of credit card often offers an interest-free period. During this time, you won’t pay interest on your purchases.
Eligibility criteria can vary. You may need to be an existing customer or have a good credit history to qualify.
With this type of card, it’s important to make at least the minimum payment on time each month. This helps you avoid late fees and could help keep your credit score healthy.
Balance transfer and purchase card
A balance transfer and purchase card gives you a bit of everything. They’re ideal for anyone who wants to control spending and move their existing credit card debt.
A balance transfer card lets you combine your credit card balances into one, and often offers a 0% interest period. If you’re paying high interest on other cards, this can simplify your payments. It may also lower your interest costs, as long as you make your minimum payments on time.
A purchase card allows you to buy now and pay later, usually without interest for a set period. It’s a way to spread the cost, especially for those big purchases.
To be eligible, you typically need a good credit score. But using credit regularly can help you improve your credit history over time.
Student credit card
These types of credit cards are for students with little or no credit history. They help students access credit while studying.
Student credit cards usually have lower credit limits and higher interest rates. This is because lenders see students as higher-risk borrowers.
When used responsibly, these credit card types can help students build credit. This may lead to better borrowing options and lower interest rates in the future.
Travel credit card
These credit card types are great for frequent travellers. They help cardholders save on foreign exchange fees and enjoy other travel perks.
Benefits can include earning travel points, cashback on travel-related expenses, and travel insurance. If you love to travel and would like to reduce the cost of using a card abroad, a travel card could be a great option.
But make sure to weigh up the benefits against the possible fees (like annual costs and late payment fees). This will help you find a card that fits your travel habits and financial goals.
Money transfer card
Money transfer cards let you send money to your bank account or someone else’s account. This type of credit card is handy for several reasons.
It can cover emergency costs, help combine debts, or let you buy second-hand items when the seller doesn’t accept credit cards.
It’s important to know the terms before accepting any agreement. This includes fees, repayment plans, and whether this card suits your lifestyle.
Reward card
Reward cards are types of credit that give you rewards for payments or purchases. You usually earn points, cashback, or travel miles. The different card types include:
- Cashback cards let cardholders earn a percentage of their spending back as cash rewards.
- Travel points cards made for travellers. These types of cards give points or miles that can be used for flights, hotel stays, and other travel costs.
- You can redeem points for goods or services. You earn points through everyday shopping, like food or fuel. You can use these points for different rewards, like retail items, travel, or groceries.
When used responsibly, reward cards can boost your credit score over time. They also offer hundreds of great deals that save you money.
Just look at the annual fees and charges that come with them before making any decisions. You may need a good credit score to get approved.
Business credit card
Business credit cards are made for entrepreneurs, freelancers, and business owners. They help manage business expenses. These credit card types are great for clearly separating personal and business finances.
Getting approved can be harder than personal credit cards, as lenders often look at the business’s creditworthiness. When used responsibly, they can be a valuable credit card for businesses, as they offer benefits like expense tracking and cash flow management tools.
Vanquis credit cards
Check out our selection of Vanquis credit cards, designed to help you manage unexpected expenses and build your credit.
Easily check your eligibility for all our cards with our free tool, allowing you to explore your options without affecting your credit score.
Find the ideal credit card for you and get the support you need to manage your spending today.
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