Why I love all-round credit cards

If you like to keep your credit cards simple, an all-round card is for you. And what's more, there's now a great selection to choose from

I'm a simple kind of a guy, which is part of the reason I've always had a soft spot for all-round credit cards. Why have different credit cards for different purposes when you can have one that does it all?

Last year I wrote about why the Halifax All in One credit-card was my favourite bit of plastic on the market. However, in the year that's passed since then, not only have the cards on offer improved a hell of a lot, but there's now an even wider choice of brilliant all-round credit cards.

How an all-round credit card works

First, let's look at why all-round credit cards are good. Generally it's a good idea to have a couple of different credit cards, one for purchases and one for balance transfers. That way you can make the most of separate 0% periods on each.

However, an all-round credit card offers identical periods of 0% interest on both purchases and balance transfers, allowing you to use it for both free of any worries.

Negative order of payment

One of the big reasons to go for an all-round credit card is that it offered a way around negative order of payment. This is a nasty trick that credit card providers use to milk us for every penny they could, by taking the money that we pay towards our bill each month and putting it towards the cheapest debt first.

So for example if you were still in the 0% balance transfer period of your card, with say £2,000 on there, and then made a purchase of £100, but your 0% on purchases had expired, you would have to clear the £2,000 balance you'd transferred onto the card before you could pay off that new £100 purchase. And while you chipped away at clearing that existing balance, the £100 you had spent would sit on your card, racking up interest.

However, the Government has thankfully ordered the banks to sort out this nasty trick, and so from January 2011 lenders will have to employ a positive order of payment – in other words your payments will go towards the most expensive debts first.

While some credit cards are getting ahead of the curve by implementing the change now, not all are so an all-round credit card is still a great way around this trick in the short-term.

Big purchases

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Now that's all great, but in order for an all-round credit card to offer a decent alternative to simply having two separate cards, it will need to offer an attractive period of 0% interest.

If you are facing the prospect of some big spending in the next year – and with a baby on the way, I know I certainly am – then life is a lot easier if you can spread those payments out over as long a period as possible.

I liked all-round credit cards back when the longest 0% period on offer was 9 months - what's brilliant is that since then, the market-leaders have seriously upped their game, to the point that they now offer an entire year of 0% interest on purchases.

That's actually the same as the market-leading purchase cards!

Clearing a balance

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How long do you need to clear that balance you've built up on your credit card? It's a question I've asked myself more than once over the last couple of years. If you have only a fairly modest sum built up, then again the all-round credit card is a great bet, as with the top cards in the market you will get a whole year to pay off that debt without having interest charged on top.

Now, it's true to say this is not at the same level as the market-leaders – with some balance transfer cards, you get 15 or 16 months of 0% interest, as you can read about in Nine extremely long interest-free cards.

However, for most of us a year is more than long enough to clear that balance.

8 top all-round credit cards

So if you only want to have one credit card in your wallet to cover all situations, which one should you go for? I’ve put together the table below on my favourite all-round credit cards, and how long they offer interest-free.

*Must have a Nectar Card

Compare credit cards at lovemoney.com

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