It used to be when you wanted to apply for a credit card, choosing the best was an easy thing. The best card was the one that offered you the lowest APR and membership fees - that is to say, the one that cost you the least to use. Low APR was the biggest selling point, backed up by no membership fees, or low membership fees. A few years back though, companies started recognizing that interest rates - low interest rates - weren't always the best draw for new business. After all, you can only lower your APR so far - 0% intro rates aren't uncommon anymore - before you start paying people to use your product. One can almost imagine the conversation around the boardroom table the first time someone tossed out THAT idea - let's pay people for using our credit card! It sounds like a bizarre idea, but in point of fact, it is precisely the idea behind reward credit cards.
The fact is that the companies only make part of their money from the interest rates that they charge on their best products - or on all combined. The greater portion of their income comes from transaction fees charged to merchants who accept their card. Since the company gets a transaction fee from a merchant every time you use their credit card to buy something, it's in their best interest to encourage you to use yours as often as possible. Thus, the different issuers have come up with a variety of reward schemes to get you to use their credit card for purchases instead of ponying up cash at the till.
Those reward schemes range from paying you cash back for every purchase to giving you free airline travel to filling up your tank with petrol at the pump. Generally, deciding which is the best credit card reward scheme is a very personal matter. It depends on which of the rewards offered are most valuable to you and which add little value. There are some reward offers that have wide appeal, though. Some of the best deals you'll find when you apply for a credit card are at comparison websites.
American Express Nectar Credit CardThe Nectar credit card is designed for the UK market. It offers the most competitive APR (12.9% typical), and a balance transfer rate of 5.9% for the life of balance transfers made in the first six months. Even without the reward, this one ranks up there in the best, but when you add in up to 4 reward points for every 1 spent, and dozens of UK merchants participating in the rewards programme, you've got one of the best credit card combination offers out there today.
Marbles Online Credit CardThe Marbles Online Credit Card combines a mid-level APR (14.9%, frozen through the rest of the year) with an no-exceptions rewards programme. No complex figuring up of three points here and half a point there - every purchase you make with your Marbles card earns you.5% cash back paid into your Marbles Online account each February. If you're the type to clear your balance every month, and charge most of your expenses to your Marbles card, you'll end up with a nice boost to your post-holiday finances - to spend any way that you like. Flexibility and simplicity make Marbles one of the best rewards programmes that we've seen.
These are only two of the best offers you'll find at the moment. If you're planning to apply online, be sure to check out all the offers and information available to be sure that you get the best credit card for you.
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