The best credit cards for 2010

Breathe new life into your finances this year by grabbing one of these cool credit cards...

With the start of a new year, our thoughts naturally turn to the opportunities 2010 will bring. So, along with promises to stop drinking, quit smoking and to lose weight, now is the time to make financial resolutions for the coming 12 months.

For me, my priority is finding a new credit card, as my existing card simply doesn't offer me enough to win my loyalty for another year. As my plastic provides no special deals or rewards, it's high time that I ditched and switched.

Like me, if you're looking for a new credit card to help you to budget and make money, then here are my Best Buys in five different categories. Play your cards right and there's a card here to suit every purse and wallet!

1. Best for cashback

Why get a cashback card?

Simple: so you can earn as you spend.

Every purchase made on a cashback card adds to your cashback payout at the end of the year (or on the anniversary of your card opening). Use your cashback card sensibly and you can earn serious lolly. By putting all of my non-trivial spending onto a top cashback card and always paying off my monthly bill in full, I have banked over £250 a year. Here are the top two in this category:

*Card*	*Cashback offer*
American Express Platinum Cashback Card	Introductory 5% for 3 months on spending up to £2,000. Standard 0.5% on first £3,500 a year; 1% on spending of £3,501 to £7,500 a year; 1.25% on spending over £7,501 a year. Minimum spend of £3,000 a year.
Egg Money World MasterCard	1% on spending of £500 to £20,000 a year. Cashback of under £5 a year is not paid.

Card

Cashback offer

American Express Platinum Cashback Card

Introductory 5% for 3 months on spending up to £2,000.

Standard 0.5% on first £3,500 a year; 1% on spending of £3,501 to £7,500 a year; 1.25% on spending over £7,501 a year. Minimum spend of £3,000 a year.

Egg Money World MasterCard

1% on spending of £500 to £20,000 a year.

Cashback of under £5 a year is not paid.

2. Best for 0% on purchases

Why get a 0% on purchases card?

Most ordinary credit cards provide you with an interest-free period of between 45 and 59 days, but only if you repay each monthly bill in full. With a 0% on purchases card, you can enjoy interest-free credit lasting up to 12 months. To do this, pay only the minimum monthly repayments during the 0% period, but be sure to repay the residual balance before your 0% deal ends. Here are my top picks:

*Card*	*Introductory* *0% period*	*Typical rate* *(% APR)*
Tesco Bank Clubcard MasterCard	12 months	16.9%
Sainsbury's Finance MasterCard	10 months	15.9%
Marks & Spencer Money MasterCard	10 months	15.9%
Saga Over 50's Platinum Visa	9 months	11.9%
Bank of Scotland All in One MasterCard & Halifax All in One MasterCard	9 months	15.9%

3. Best for 0% balance transfers

Why get a 0% balance transfer card?

A typical credit card charges a yearly rate of over 18% APR. For store cards, the typical interest rate exceeds 25% APR. What's more, despite the Bank of England's base rate being at a 315-year low of 0.5% a year, interest rates on credit cards have risen, not fallen, in 2009.

So, if you're paying double-digit rates of interest on your plastic, then it's high time that you switched your existing balances to a 0% balance-transfer card. By doing so, you can freeze your interest bill for up to 16 months. However, this isn't a free lunch, as you will pay a transfer fee of up to 3% for the privilege of shifting your debts. Here are my three top 0% transfers:

*Card*	*0% transfer* *period*	*Transfer* *fee*	*Typical rate* *(% APR)*
Virgin Money Credit Card	16 months	2.98% (Min. £3)	16.6%
Santander	15 months	3.00% (Min. £5)	15.9%
MBNA Platinum Visa	13 months	2.90% (Min. £3)	15.9%

4. Best for lifetime balance transfers

Why get a lifetime balance transfer card?

If you can't be bothered to switch your debts between 0% transfers every 12 months or so, then the hassle-free alternative is to opt for a fixed-rate lifetime balance transfer. As with 0% transfers, lifetime transfers sometimes come with fees attached, plus they charge interest at rates upwards of 6.7% APR.

The gold medallist in this category is the MBNA Platinum Low Rate Visa, which charges 6.7% APR on balance transfers until they are repaid - and there are no fees to pay on balance transfers and money transfers! The only downside is that this rate is variable, so it could go up. If you'd like the peace of mind that comes with a card with a fixed rate, the Barclaycard Platinum Simplicity Visa card is a good alternative. It charges just 0.1% more than MBNA - so 6.8% APR, but the rate is fixed for the life of the balance transfer.

5. Best for low rates

Why should you get a low rate card?

Personally, I don't mind paying interest once in a while, but only if the rate on offer is very low. There's absolutely no way that I'd pay 10%+ a year to borrow money, but I might be tempted by rates in the low single digits.

Of course, spending on a low-rate card makes much more sense than paying interest at the full whack on bog-standard cards. The lowest standard rate on offer, once again, comes from the MBNA Platinum Low Rate Visa, which charges 6.7% APR (variable) on all purchases. Here's wishing you a Happy New Year!

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