How to make your credit cards pay

Britain's credit-card market is one of the most competitive in the world. Most cards have no annual fees, offer attractive interest-free introductory periods, and come with generous loyalty schemes. The downside is that they also charge hefty interest rates – typically between 15 and 20 per cent APR – meaning that they're an inefficient way of borrowing for any period of time.

However, if you use your credit cards wisely, there's nothing to stop you taking advantage of all the benefits while never paying the provider a penny in interest.

Interest-free deals

If you don't already have a credit card, it will now be tougher to get your hands on one than it was 12 months ago. That said, there are still more than 50 cards offering 0 per cent balance transfer deals for nine months or more – and the best of these offers 16 months interest-free. That means that if your application is accepted, you won't have to pay any interest on your current card debt for up to 16 months.

Although most cards usually charge a fee of about 3 per cent when you transfer a balance from another card, Ulster Bank offers a six-month interest-free balance transfer deal with no charge at all, while Barclaycard Platinum offers a nine-month deal with a lower fee of just 1.7 per cent.

If you have debt on one or more cards, balance transfers offer a great way to get yourself back on track. Be careful, however, not to use your card for any other transactions once you've transferred the balance (unless the card offers a 0 per cent deal for purchases as well), as you'll start paying interest on your new transactions immediately, and won't be able to pay off your newest debt until you have paid off the whole sum that was transferred when you took out the card.

If you don't yet have any credit-card debt and are thinking about making a big purchase, there are cards available that won't charge you any interest on purchases for the first few months. First Direct's Gold Card offers 0 per cent on purchases for a full year – although you have to be a First Direct current account customer to qualify.

Taking advantage of loyalty schemes

Not all credit cards have great loyalty schemes, but there are a few good-value ones out there that can make you money if you use them wisely. Some, such as the American Express Platinum Cashback card, for example, pay you back a small percentage of every purchase you make.

In the case of the Amex card, you'll get 5 per cent on all purchases for the first three months, and then up to 1.5 per cent thereafter, depending on how much you spend each year. Citi also has a generous cashback deal, paying you 3 per cent when you buy petrol at a Shell station, and 1 per cent on all other purchases.

Other cards offer useful rewards such as air miles. The Lloyds TSB Duo card, for example, pays you one airmile for every £10 you spend. The air miles that you accrue will eventually buy you a flight including taxes. You'll need to spend £15,000 on your card to get a return flight to somewhere in Western Europe.

If you're disciplined, cashback and other reward schemes can, in effect, be a one-way bet. Here's how it's done.

Do all your spending on the credit card each month, and put your salary into an instant access savings account to earn a bit of interest. Then, pay off the full balance on your card each month – but not until the last minute, so that you can maximise the interest on your salary. This will earn you a few extra pounds in interest and give you air miles, cashback or other rewards for simply doing spending that you were planning on doing anyway. And, as long as you always pay your balance in full and on time each month, it won't cost you a penny.

Finding the right card

Websites such as and will help you to find the best deals on the market. However, in these credit-crunched times, the only people who will find it easy to get a new card are those with excellent credit histories and not too much other debt.

If that's not you, it's worth being a little more targeted when you select a card to apply for. Check your credit score by using websites such as or These sites can also help to point you towards cards that you're more likely to be accepted for.

Although a card rejection won't show up on your credit rating, there will be a mark left every time you apply for a card. If your file shows that you've been applying for lots of different cards, providers may be less likely to accept you.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Scunthorpe goalkeeper Sam Slocombe (left) is congratulated by winning penalty taker Miguel Llera (right)
Arts and Entertainment
The Apprentice candidates Roisin Hogan, Solomon Akhtar, Mark Wright, Bianca Miller, Daniel Lassman
tvReview: But which contestants got the boot?
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
Tourists bask in the sun beneath the skyscrapers of Dubai
travelBritish embassy uses social media campaign to issue travel advice for festive holiday-makers in UAE
Arts and Entertainment
Jennifer Saunders stars as Miss Windsor, Dennis's hysterical French teacher
filmJennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress
Life and Style
Nabil Bentaleb (centre) celebrates putting Tottenham ahead
footballTottenham 4 Newcastle 0: Spurs fans dreaming of Wembley final after dominant win
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

    £40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

    Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

    £45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

    Carlton Senior Appointments: Sr Wealth Manager - San Francisco - Inv AdvisoryFirm

    $125 - $175 per annum: Carlton Senior Appointments: Senior Wealth Manager – In...

    Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

    $200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

    Day In a Page

    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
    Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

    The Boy in the Dress: On set with the stars

    Walliams' story about a boy who goes to school in a dress will be shown this Christmas
    La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

    Deaf community outraged by La Famille Bélier

    The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
    10 best high-end laptops

    10 best high-end laptops

    From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
    Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

    Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

    The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
    Susie Wolff: A driving force in battle for equality behind the wheel

    Susie Wolff: A driving force in battle for equality behind the wheel

    The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
    Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

    'No abs Adam' plans to muscle in on Usain Bolt's turf

    After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
    Calls for a military mental health 'quality mark'

    Homeless Veterans campaign

    Expert calls for military mental health 'quality mark'
    Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

    Meet Racton Man

    Analysis shows famous skeleton was a 6ft Bronze Age superman
    Garden Bridge: St Paul’s adds to £175m project’s troubled waters

    Garden Bridge

    St Paul’s adds to £175m project’s troubled waters
    Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

    Stuff your own Christmas mouse ornament

    An evening class in taxidermy with a festive feel
    Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

    Joint Enterprise

    The legal doctrine which critics say has caused hundreds of miscarriages of justice
    Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

    Freud and Eros

    Love, Lust and Longing at the Freud Museum