Top Credit Cards For Clever Fools

0% cards are becoming less popular. We look at alternative credit cards for Fools who want to pay off their card balances each month.

More people have a cashback or reward credit card than a zero percent card now, according to Morgan Stanley. Just 17% of cardholders have a 0% offer, while 21% have a credit card offering cashback and 30% use cards offering points rewards. Obviously free money with 0% interest just isn't good enough for you people!

Seriously though, the real reason for this is probably the greater fees that we are charged on 0% cards these days. I hope also that it's because people are using their cards more sensibly; by paying off the balance every month they can get points or cashback on their purchases without paying any interest.

I'm a cash man myself, because even the name 'reward' card sounds gimmicky, and the word gimmick in personal finance is usually even worse than 'perk'. For example, some providers tell you that you get 1 point to spend in selected retailers for every £10 spent. Well, what the heck does that mean? Is 1 point worth £1,000 or 0.00001p? And which retailers? Perhaps we can buy a doughnut in Melmerby Village Bakery if we collect 1 million points. How do we know?

The problem is, we don't know, at least not always. Not all providers tell you what a point is worth or even where you can spend it until after you've applied for their credit card. I say, if they can't be open about it, forget them!

However, some providers are a little bit more open, even if you have to dig through the small print to find the details! Plus, getting something is better than nothing and, for the right person, a reward card could be just the thing. With this in mind, I'll name a few of the more open reward cards:

• With the amazon.co.uk credit card you get a £15 gift for every 1,500 points earned. You get 1 point for every £1 spent at Amazon shops, and ½ a point for other spending. This means you need to spend £1,500 at Amazon, or £3,000 elsewhere, but it's better than nothing. Amazon also says you get a £15 voucher after your first purchase, although it doesn't say if your first purchase has to be with them. Crafty swines!
  
  
• When you use the American Express Nectar Credit Card with a Nectar card you can get a total of four Nectar points for every £1 you spend. When you use this credit card at non-Nectar sponsors you get one Nectar point for every £1.
  
  
• American Express does it again with their British Airways Credit Card, for which you get 1 BA mile for each £1 spent. The downside to Amex cards is that not all retailers accept them, especially small shops.

Finally, remember that cashback and reward cards are best used just for purchases that you pay back every month. They are unsuitable for balance transfers, large purchases or anything else. In fact, used any other way they will almost certainly cost you a lot of money!

> You can compare reward cards and all other types of credit card through The Fool.