Money Insider: How to make credit cards pay

Andrew Hagger reveals how to get the most from your plastic

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There are hundreds of credit cards to choose from, each with different attributes, rates and benefits, and this can be confusing for consumers. It's important to ensure you get the most from your plastic by carrying the right cards, so here are a few pointers.

If you're struggling to clear a balance due to costly monthly interest charges, look at a 0 per cent balance-transfer card.

You can now go "interest free" for up to three years with Barclaycard, Virgin Money, Halifax and MBNA. But don't pick a term longer than you really need as it will come with a higher one-off balance-transfer fee – as much as 3 per cent of the balance switched in some cases.

If you pay your card off in full every month when you receive your statement, the interest rate isn't really an issue. So try and find a card that will give you something back by way of cashback or rewards. The Santander 123 card charges £2 a month but offers cashback of up to 3 per cent on some spending. Alternatively, the Platinum Cashback Everyday card from American Express has no monthly fee and cashback of 5 per cent in the first three months (a maximum £100 cash can be earned in this period).

If you're not interested in promotional offers or freebies but just want a good-value card that won't break the bank if you don't repay the full balance every now and then, Halifax (and Lloyds) offer a Low Rate card charging 6.4 per cent APR, while MBNA has a similar deal at 6.6 per cent APR.

Both cards are far cheaper than the market average of around 18.9 per cent APR, and the MBNA deal allows you to transfer funds direct to your current account and so is a smart, low-cost way to clear expensive overdrafts or loan balances.

There's nothing wrong with carrying three or four cards in your purse or wallet, as long as you make the best use of the features of each to keep your borrowing costs to a minimum.

Switch a friend

The battle between the banks and building societies to bring in more current account customers intensified last week when Nationwide launched an improved £100 Recommend a Friend switching offer.

Up until now the offer has been £50 – handed to both the Nationwide customer as well as the friend when they move their account via the Current Account Switching Service (Cass). The higher £100 offer only lasts for July and existing customers can recommend up to a maximum 10 friends.

Halifax, First Direct and the Co-operative Bank already offer a £100 "golden hello" (the Co-op also gives £25 to charity), while Yorkshire bank is putting up a £150 carrot if you switch your account to them. So the UK's biggest mutual has plenty of competition when it comes to bank account sweeteners.

As appealing as a cash incentive may sound, it shouldn't be the sole reason for choosing your current account. But in the case of the Nationwide deal, if you trust your friend and value their opinion, at least you're not switching blind – as with the other upfront "cash for your custom" offers.

If you're not getting the best from your existing bank account, now is a good time to switch as you can move your account hassle-free within seven days under the new Cass scheme.

Andrew Hagger is an independent personal finance analyst from

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