The best credit cards for 2013

If you’re looking for a fresh start with a new credit card take a look at what is on offer across balance transfer, purchase, reward and cashback cards in 2013.

Here, I have picked out some of the best on offer but for a view of the whole of the market head over to our credit card comparison centre.



0% balance transfer credit cards

If you’ve managed to rack up some expensive credit card debt in 2012 you might want to try and make it more manageable with a balance transfer.

An interest-free balance transfer credit card is a great tool to freeze the size of your debt for a number of months, giving you time to pay off what you owe without having to worry about interest piling up.

The only catch is that most cards come with a one-off fee (usually around 2-3%) to do the transfer. But weighed up against the 15-19% APR you're probably already paying, it still works out as a much cheaper way to manage the debt.

Here is a selection of the five longest lasting 0% balance transfer cards on the market right now:

Card

0% period

Fee

Fee on a £2,000 transfer

Barclaycard 24-Month Platinum Visa

24 months

2.1%*

£42

Barclaycard 23-Month Platinum Visa

23 months

1.9%

£38

MBNA 23-Month Platinum Visa

23 months

2.85%

£57

NatWest Platinum BT Credit Card

23 months

3.5%

£70

Halifax BT 23-Month MasterCard

23 months

3%

£60

*On balance transfers over £2,000

As you can see Barclaycard is top of the table with a card that will freeze the size of your debt for two years for a fee of 2.1%. To get access to this fee you need to transfer at least £2,000, for smaller balances a 3.2% fee applies.

But you can get a cheaper deal by just slashing one month off and going for the 23-month option which comes with a smaller charge of 1.9%.

However, if you aren’t after the longest deal and are more concerned about the cost you can find cards with a much cheaper fee around the 1% mark. Barclaycard, for example, has a 12-month deal charging 0.9%. Transferring a £2,000 debt with this card would only set you back £18. For more low cost and long lasting balance transfer credit cards, check our credit card comparison centre.



0% purchase credit cards

If you’re planning some home improvements, large purchases or want to bag some bargains in the January sales, a good way to go about it is to get some interest-free credit with a 0% purchase credit card. We have a whole range on offer, but I have picked out three that caught my eye.

The market leader at the moment is the Tesco Clubcard Credit Card for Purchases. With this card purchases remain interest-free for 16 months, meaning you have more than a year to pay back what you spend before the 16.9% APR kicks in. It's not just a great card for purchases; it also acts as a great reward card, as you can earn points on your spending that can be exchanged for vouchers to use on holidays, rail travel, restaurant trips and days out.

Next up is the M&S Credit Card which comes with 15 months interest-free on purchases. If you’re a regular Marks & Spencer’s shopper then this card might be more appropriate as every time you spend you earn M&S reward points. Plus you can get M&S travel money with no cash advance or foreign exchange fees. The card also comes with a lower 15.9% APR.

Lastly if you are looking for a good deal on both balance transfers and new purchases the Halifax All in One Online MasterCard might be better for you. It comes with 15 months interest free on purchases and transfers (for a 3% fee).  However the length of the offer is dependent on your personal circumstances, so you might receive a different timeframe when you apply.

Plus this card has the most expensive APR of 17.9% which will kick in after the introductory period.



Reward credit cards

If you’re not the sort of person that needs to worry about the best interest-free deals you might want to go for a credit card that rewards your spending instead. There are loads to choose from but here are three reward credit cards that appealed to me:

Travel - the Lloyds TSB Duo Avios Credit Card is great if you want incentives based on travel. The duo comes with one Amex card and one MasterCard to increase your earning potential. You can earn one Avios for every £1 spent on the American Express card and one Avios for every £5 spent on the MasterCard.

Avios points can be exchanged for a number of things but are especially useful for flights and stays in hotels. And the Lloyds card gives you a great head start. As an introductory offer you get 18,000 Avios when you spend £500 a month for the first three months using the American Express part of the duo. That’s enough for two return flights. You could also bag 1,500 Avios for every £1,000 balance transferred from a single provider.

Supermarket- I’ve already mentioned how rewarding the Tesco Clubcard Credit Card can be but what if you’re not a regular Tesco shopper? Well one alternative is the Sainsbury’s Bank Nectar Credit Card. You can collect ten Nectar points per £1 on Sainsbury’s shopping (up to £1,000 a month) for the first three months. After the introductory period you can earn four points per £1 on Sainsbury’s shopping. When you shop elsewhere you can earn one point for every £5.

Nectar points can be used on a wide variety of rewards like days out, travel and restaurants or can be used at Sainsbury’s to help pay for your supermarket shop. In addition to the rewards the card also offers six months interest-free on purchases and 15 months interest-free on balance transfers (with a 3% fee).

High street - if you want to earn points that you can put to good use on the high street there are a number of cards you can go for. I have the AA Members Rewards Visa  where I earn one point for every £1 I spend on motoring purchases or one point for every £2 spent on anything else. The AA reward points you earn can be used for high street vouchers, treats, AA products and cashback of up to 4%.



Cashback credit cards

Ever thought about earning money as you spend? Well with a cashback credit card you can do just that. Here is a rundown of the three top paying cards at the moment:

The Barclaycard Cashback Visa pays an impressive 6% in the first three months on your five biggest purchases capped at £120. Thereafter you will have the opportunity to earn 2% on your five biggest purchases and 0.5% on everything else as long as you make 15 purchases in a month. You will also get a 4% bonus on your top five purchases in the month after your first anniversary with the card. The only catch is you have to pay an annual fee of £24.

If you hate the sound of an annual fee then the American Express Platinum Cashback Everyday Card is a good alternative. It pays a 5% rate in the first three months with the potential to earn up to £100. Thereafter you have tiered rates of cashback of between 0.5% and 1.25%. The card doesn’t come with an annual fee but you will be unlikely to be accepted if your household income is below £20,000.

Personally I really like the sound of the Santander 123 Credit Card. It pays tiered levels of cashback on everyday spends. You get 1% at supermarkets, 2% at department stores and 3% on petrol, National Rail and TFL spends. However, an annual fee of £24 applies unless you are a 123 current account holder.