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Choosing a credit card

What is a credit card?

  • Credit cards can help you manage your money and provide a secure way to pay. You can use them to borrow and spread the cost of your everyday spending.
  • Credit cards are often used for short-term borrowing for daily shopping such as groceries. They can also be used for larger purchases such as holidays.
  • A credit card can be used to combine balances from most credit cards and some store cards. The cards must have a Visa®, Mastercard® or Amex® logo.

Credit cards explained >

When it comes to credit, making an informed decision is important.

This section will give you a much better understanding of the things you need to take into consideration before choosing a card.

Terminology

Annual Percentage Rate (APR) - tells you how much your borrowing will cost over an average year. It takes into account interest that will be charged as well as any extra fees you will have to pay (such as any annual fees). The APR can help you to compare credit cards in an easy and fair way.

Balance transfer - is the process of transferring a balance from one credit card to a different credit card. Balance transfers can help you combine all your debts into one place. You may also be offered a promotional rate which helps to reduce the cost in the short term. Normally you will be charged a fee for this type of transaction. After a promotional rate has ended the balance will always go back to your standard rate, which will normally be higher.

More about balance transfers >

Fees and Charges - Credit card providers may charge fees if you use your card for:

  • cash transactions
  • non-sterling transactions
  • balance transfers and money transfers
  • They may also charge a fee if you request a copy of a statement

You could pay an annual fee just for having a card, even if you do not spend on it. You may be charged more than one fee for a single transaction. For example, for a cash transaction in a foreign currency we charge both a cash transaction fee and a non-sterling fee.

Keep in mind that we do charge interest on fees, except annual fees, purchases during the interest free period and default charges. So you know, no interest will be charged on default charges within the first 28 days from the time you are notified that these are to be paid. After this time interest will be charged.

Default charges may apply if:

  • you miss a payment
  • you make a late payment
  • you go over your credit limit.
  • your payment is returned unpaid.

Rates and charges explained >

Types of card

Credit cards can fall under a few different categories. Understanding these will help you to decide the type of card you are looking for. Here are some of the types of cards that we have to offer.

A Balance Transfer card can help reduce the interest you pay on your current credit card debts. This type of card lets you transfer all or part of a credit card or some store card (if they have the Visa®, Mastercard® or Amex® logo) balances onto a new credit card. You may receive a 0% introductory offer. When this introductory offer ends, the balance that remains on your account will start to be charged at the standard rate of interest.

A Purchase card is often used for buying everyday goods or services. It may include a promotional 0% period. This can be useful if you need to make a large purchase, as you will not pay any interest. When the 0% period ends you will be charged your standard rate. You will be required to pay the minimum payment on time each month.

Combined cards will often have 0% interest introductory offers for both purchases and balance transfers. A balance transfer will let you transfer the balance from one credit card or store card (if they have the Visa®, Mastercard® or Amex® logo), on which you may be paying interest, to another credit card. It can also be helpful if you want to make a large purchase so you can spread its cost for a promotional period.

Reward
Reward cards give you something back when you spend on the card. Each time you shop you can collect points and use them to get shopping vouchers, cashback, travel and more.

Reward cards do not usually have a low APR. This means that they would benefit people who spend around £350 or more per month on their credit card. If you tend to spend less than £350 per month then you may not earn as much in Rewards to cover the Annual fee that Reward cards normally charge.

Low Rate
Low rate credit cards could save you money on charges and interest. Low rate credit cards normally have a lower APR (between 6% and 15%) than standard balance transfer and rewards cards. These cards tend to have an APR of between 15% and 25%. A Low rate card may be useful if you don’t want to worry about promotional periods ending as it has one interest rate.

What does it mean for me?

Your biggest commitment is to pay back what you borrow plus any interest charged and stay within your credit limit. Each month you must pay back at least the minimum amount on time. This amount is shown on your statement. Please read your credit card terms and conditions carefully so you understand how your credit card works.

Even if your card offers a 0% interest period on purchases, if you do not make the minimum payment on time each month, you will be charged interest on top of your purchases. If you only pay the minimum each month, you will end up paying more interest over a longer period of time. It will also take more time to pay off your balance.

Interest charges will apply on balance transfers (outside of a promotional offer), credit card cheques or cash withdrawals made on your credit card even if you pay off your balance in full.

If you miss or make a late payment, you will be charged a fee. To help avoid this fee, you can choose to pay between the minimum and full amount by Direct Debit each month. Missing a payment could also have a bad effect on your credit rating. This can make it hard to get credit in the future.

You should also stay within your credit limit to avoid being charged a fee.

When we make a decision to lend, we consider a number of factors, such as credit history (i.e. if credit card payments have been maintained and how long the current account has been held), current level of borrowing and financial commitments.

If successful, you will get a credit limit and any applicable promotional rates, which will be based on your current status.

At least 51% of successful applicants will receive the representative APR. You may be offered a different promotional period, rate or product which will be based on your current status. Please check all the features of the credit card to make sure that they still meet your needs as they may differ from the card you applied for first of all.

ClickSafe is a free service that helps make sure that you are the only person that can use your card online.

Stay secure >

If you’ve bought something with your credit card, the credit card issuer and the merchant may be equally liable for compensating you if things go wrong.

Payment disputes >

Selecting a card

You can use our card selector tool to help you find the right card for you. It lets you:

  • filter cards based on what you would like the main purpose of your card to be.
  • view results by entering an existing balance to transfer or how much you want to spend.
  • you can also sort results by lowest cost and longest 0% interest period.

Find the card for me

Ready to apply?

Our handy guide tells you if you are eligible for a card and the information that you will need to provide. You'll also find out what happens after you apply.

Existing customers

If you have a Lloyds Bank credit card then this is the place to find out how to manage and service your card. This covers information on balance transfers and money transfers.