Ditch these credit cards - quick!

If you have any one of these credit cards, the time has come to ditch and switch!

Credit cards can work with you, or they can work against you. So here, I’m going to reveal some of the worst credit cards on the market and suggest some far better alternatives!

No interest-free days

As we recently explained in 88% of us don’t know this about our credit cards, the majority of credit cards allow you several weeks of interest-free credit, regardless of any promotional offers they might have.

In many cases, this interest-free period could be as long as 59 days. So that means you have nearly two months of interest-free credit before you start paying interest on your balance.

However, while this sounds pretty great, there are a handful of credit cards that don’t offer interest-free periods and will start charging from the moment you spend on them.

Two examples of this are the First Trust Bank Option 3 card (14.9% APR) and the Lloyds TSB Advance MasterCard (11.9% APR).

So if you have either of these cards, I’d suggest ditching them and exchanging them for a card that does offer an interest-free period.

Ultimately, the best card to choose is going to depend on what you need it for. If you need to carry out a balance transfer, for example, you might want to plump for a 0% balance transfer credit card such as the Barclaycard Platinum 16 Month BT Visa which offers 16 months interest-free on all balance transfers. Bear in mind there’s a 2.9% transfer fee.

However, if you’re only planning to spend on your credit card, a 0% on new purchases credit card might be more up your street. The Tesco Clubcard Credit Card MasterCard offers 13 months interest-free on all spending. So that means you’ll have over a year to spend without worrying about paying interest.

Alternatively, if you would rather not concern yourself with promotional periods, and you’re simply after one low rate for life, check out the Barclaycard Simplicity Visa Card which offers an interest rate of 6.8% APR on all purchases and balance transfers for the lifetime of the debt.

And once you’ve got to the point where you can clear your balance every month, all of these credit cards offer an interest-free period. Tesco offers 51 days and Barclaycard offers 56 days.

Store cards

Store cards are one of my ultimate pet hates. If you have one, I say: get rid of it!

The trouble with store cards is that they can entice you in by offering rewards such as 10% off there and then, as well as regular money-saving vouchers and exclusive cardholder evenings. But the minute you sign on the dotted line, be careful! Store cards are renowned for having ridiculously high interest rates.

Of course, if you can guarantee you will ALWAYS pay off your bill in full each month, this won’t be a problem. But if you’re prone to forgetting every now and then, don’t use a store card otherwise it could take you a very long time to pay off your balance in full.

Some of the worst offenders include the Argos Card at 29.9% APR, the Burton and Dorothy Perkins Cards at 29.9% APR, the Miss Selfridge Card at 29.9% and the Mothercare Card at 24.9%. Given that the average interest rate on a credit card is 18.8%, according to Moneyfacts, you can see that these rates are much higher than average. And will certainly cost you more than you save with the 10% discount.

What’s more, if you don’t use your card for three consecutive months, certain store cards also have the audacity to charge you a fee of up to £10! Outrageous!

So I think your best bet is to avoid store cards all together. If you know you struggle to pay off your bill in full each month, a better option is to choose a 0% on new purchases credit card such as the Tesco Clubcard Credit Card MasterCard I mentioned above.

However, if you do religiously pay off your bill in full each month, why not opt for a cashback credit card and get rewarded for your spending? The American Express Platinum Cashback Credit Card offers 5% cashback in the first three months and up to 1.25% after that.

Sneaky reward cards

If you're a keen jet-setter, you may have a rewards credit card in your wallet that allows you to collect airmiles.

However, when you come to spend your airmiles, some credit cards won’t include passenger taxes and fees with the flight and instead, you’ll have to cough up for these yourself. This can come as a bit of a nasty surprise so make sure you keep an eye out for this.

The Virgin Atlantic Black American Express card is one such card – and you’ll have to pay an annual fee of £115 as well!

Personally, I think a much better option is the fee-free Lloyds TSB Airmiles Duo Credit Cards which is part of the Airmiles scheme and you won’t have to pay any tax or booking fees on your flight! You can find out more about rewards cards in Bag a free holiday with your credit card.

Recent question on this topic

• simcath asks:

  How can I clear my credit cards off quicker?

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    JoeEasedale answered "Snowballing gives you the best speed. Pay the minimum on all credit cards except the most..."
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Annual fees

Charging a monthly or annual fee on a credit card seems to be becoming an increasingly common trend. In return, you might be offered some kind of reward, such as cashback or airmiles or travel insurance.

Some credit cards are worse than others. For example, the newly launched Sainsbury’s Finance Gold Credit Card requires you to pay a monthly fee of £5 – so £60 a year. (Find out more about this card in A new credit card to use abroad.) In comparison, with the British Airways American Express Premium Plus Credit Card, you’ll have to pay an annual fee of £150 – so considerably more!

If you’re thinking about applying for one of these cards, I’d strongly suggest examining whether the benefits of the credit card are genuinely going to be of use to you and whether they really are worth the amount you’ll be paying out.

Personally, I am not a fan of paying for credit cards and I think you’re much better off choosing one of the hundreds of credit cards you can get for free! And all of the credit cards I have recommended in this article are fee-free!

Low repayments

If you only ever pay the minimum monthly repayment on your credit card, it can take a very long time to pay off your debt and not only that, but you’ll end up paying out A LOT in interest. Often the minimum monthly repayment is set as low as 2% or 2.5%. However, a handful of cards are even worse than this at just 1%! And of course, the lower the minimum monthly repayment, the longer it takes to repay your balance.

Halifax and Capital One Bank are two of the worst offenders in this category. So if you have one of these credit cards, either ditch it for a better one, or make sure you pay off more than the minimum monthly repayment – that said, this is a good habit to get into anyway, regardless of how low the minimum monthly repayment is set.

A good way to do this is by setting up a standing order to pay off a certain amount each month or a direct debit to pay off the balance in full.

High interest cards

Finally, if you’re paying a lot of interest on your credit card for whatever reason, the time has come to stop! Make sure you shift your debt over to a 0% balance transfer credit card, such as the Barclaycard Platinum 16 Month BT Visa I mentioned at the beginning. That way, you’ll have 16 months to get your finances in order and start tackling your credit card debt without worrying about the interest stacking up.

I’ve said it before, and I will say it again – don’t pay interest when you don’t have to!

More: Something you need to know about your credit card | Win rewards for spending interest-free