How to pick the right credit card for your needs with help from some celebrities.
If you’re looking for a new credit card, the choice can be bewildering.
It’s not quite as simple as just comparing the best rate of interest: after all, some cards offer cheaper rates for spending than for transferred debts. Some do the opposite.
And there are all sorts of different deals: some are aimed at students, others at business owners. Certain cards give you cashback or Airmiles in return for every £1 you spend, and you can even sign up for plastic which helps rebuild your credit record if you’ve had problems dealing with debt in the past.
So to help you find the card that suits you best, we’ve enlisted some celebrities to illustrate the benefits of different credit cards.
Simon Cowell: Airmiles card
With hit TV shows and numerous other business interests on both sides of the Atlantic, pop guru and international jet-setter Simon Cowell’s best bet when it comes to credit cards is one that rewards his spending with Airmiles.
This means that, every time he uses the card to make a purchase, he’ll be credited with a certain number of Airmiles that can be used to cut the cost of his London to LA flights.
The Lloyds TSB Airmiles Duo gives you two cards (hence the name): an American Express card, and a Visa card.
During the first three months, for every £1 spent on the Amex card, you get one Airmile; after that you get an Airmile for every £10 spent.
And on the Visa card, you get one Airmile for every £50 spent, or double this if you spend outside the UK.
Bob Geldof: Charity card
It would be no surprise to find a charity credit card in the wallet of Band Aid and Live Aid supreme Bob Geldof.
These cards enable customers to give some cash to good causes every time they spend.
Take the Virgin Charity Card for example: you can nominate a charity to get 0.8 per cent of the value of all your spending. This means if you spend £100, your charity will get 80p – which is rounded up to £1 if Gift Aid is added.
Kerry Katona: Credit-rebuilder card
Former pop star Kerry Katona has had some well-publicised debt issues over recent years. In 2008, she was declared bankrupt in the High Court after failing to settle a tax bill.
A bankruptcy can affect an individual’s ability to get credit for years after the order is made. Certainly, lenders are likely to be much more cautious when it comes to okaying applications for loans and cards.
Anyone who has had their credit record damaged, however, can take steps to get things back on track by signing up for a credit-rebuilder card.
These deals give you a better chance of being accepted, but they usually impose high levels of interest. The aim is to use them sparingly (and pay off debts every month to avoid interest charges) in order to demonstrate that you are able to meet repayments.
The Capital One Progress card, for example starts with annual interest of 29.9 per cent, but this falls to 17.9 per cent in three years if you stay within your credit limit and keep up to date with payments.
Sir Elton John: 0 per cent purchase card
If you’re a big spender like Sir Elton John, the last thing you want to do is run up huge interest charges. Here’s when a zero-rate purchase card comes in.
With the Barclaycard Platinum with Purchase card you’ll face no interest charges for the first year. But make sure you can clear your debts before the initial 12 months are up: after that, you could be paying 16.9 per cent annual interest.
Jeremy Clarkson: Cashback card
The soaring cost of fuel must be a nightmare for petrolheads like Top Gear presenter Jeremy Clarkson.
But Jeremy and fans can ease the pain to some extent by taking out a credit card which offers cashback whenever you fill up your car.
The MBNA American Express Cashback card offers 1.5 per cent cashback on purchases made in supermarkets and filling stations, and 0.75 per cent cashback on other types of spending.
Emma Watson: Student card
Harry Potter star Emma Watson is reported to be on a break from her studies at the prestigious Brown University in Rhode Island, US. And to be fair, the success of her films means she probably doesn’t have worry too much about getting credit.
But for other undergraduates, a student card is one way of dealing with potential cashflow problems while waiting for the next loan cheque to clear.
The NatWest Student Card for example offers a credit limit of up to £500, alongside discounts at brands such as HP, Lonely Planet and Firebox.com.
Lord Sugar: Business card
If you’re head of an enterprise, getting the right card for staff spending is important.
A business card allows the company to set credit limits and keep track of purchases: ideal for Lord Sugar as he tries to keep his Apprentice candidates under control as they go about their various challenges.
The Barclaycard Commercial card, for example, has all these benefits, and allows firms to make a single monthly repayment to cover all company cardholders.
*All rates correct at time of publication