Credit cards are a Marmite financial product. Some love the perks they provide, while others hate the idea of debt hanging over them.

The truth is that while you need to be careful not to spend money you can’t afford, credit cards can be a powerful weapon in your financial armoury if used wisely.

You’ll benefit from protection under a law called Section 75, which lets you claim a refund from the card provider if goods and services are faulty, not as described or don’t arrive at all (provided the goods cost more than £100).

The trick is to choose the right card for the job, make sure you have a plan for paying off the balance and avoid overspending and incurring interest. 

You should also check your eligibility for the card before making a full application. The check won’t affect your credit history.

Here are the best cards currently on the market, who they suit – and what to watch out for.

Best for travel

If you travel frequently for work or leisure, getting a credit card that doesn’t charge transaction fees when spending in a different currency should be a priority.

Credit card providers typically charge around 3 per cent on non-sterling transactions – £3 on every £100 you spend – so fees quickly add up. They often charge even more if you withdraw cash from an ATM.

But you can get cards with no overseas fees that also let you withdraw cash without paying a fee – useful in an emergency.

Your exchange rate should be set by the card issuer – such as Mastercard or Visa. When at the payment machine or ATM, choose to pay in the local currency rather than pounds sterling, because it’s likely the merchant will give you a worse exchange rate than your card issuer’s one.

Our pick: Lloyds Bank’s Ultra Credit Card (lloydsbank.com) comes with no foreign exchange fee and no fee on cash withdrawals.

Interest is a relatively low 12.9 per cent variable, plus you’ll get 1 per cent cashback on purchases for the first year, after which it drops to 0.25 per cent.

Beware that interest is charged on cash from the moment you withdraw it until you pay it back.

Best for big spends

You can spread the cost of large purchases over an interest-free period using a 0 per cent purchase credit card. They are useful if you’re set to spend a lot of money, for example on a family holiday or a renovation project.

These cards offer a very cheap way to borrow, provided you make the transactions and clear the balance within the 0 per cent period. If you don’t manage this, you’ll get hit with hefty interest charges.

Even though no interest is added during the 0 per cent period, you still need to make the minimum repayments, otherwise you’ll get walloped with late fees and the card provider could revoke the 0 per cent deal.

Check how long your 0 per cent period might be before applying. Some cards come with a guaranteed interest-free period, while others might offer you a shorter period depending on your credit history.

Our pick: TSB’s Platinum Purchase Card (tsb.co.uk) offers 0 per cent interest on purchases for up to 26 months, but you might get a shorter 0 per cent period of 22 or 19 months depending on your credit history. 

The regular interest rate is 24.9 per cent APR variable.

Best cards for rewards

Reward cards give you a kickback on everyday spending.

This is often in the form of cashback on purchases, which can either help reduce the balance you need to pay off or be paid

into your bank account. Some cards let you rack up points to convert into shopping vouchers or even flights, such as with the popular Avios scheme.

You can earn returns on regular purchases, such as fuel, food or public transport, or big one-off spends, such as furniture or holidays. If you don’t pay off the balance in full each month, interest payments will outstrip the value of rewards you receive.

Our picks: For a simple cashback card, have a look at the American Express Cashback Everyday card (americanexpress.com).

This currently pays 5 per cent cashback, up to a maximum of £125, during the first five months for new customers. You would need to spend £2,500 to earn that amount.

Beyond this, the regular rate is 0.5 per cent up to £10,000 a year and 1 per cent above that. 

So on your next £7,500 of spending you could earn £37.50 and then beyond the £10,000 mark you earn £1 for every £100 spent. Cashback is credited annually and you must spend £3,000 a year to qualify.

Airline points are a very popular reward, letting you build a pot you can exchange for flight tickets.

If you want to collect them, you need to look for credit cards linked to specific reward schemes or airlines, such as Avios.

Many cards have bumper introductory offers, so it’s a good idea to sign up when you can maximise the rewards.

Our pick is the American Express Preferred Rewards Gold card thanks to its flexibility. You can swap points to use at a host of airlines, including British Airways and Virgin Atlantic.

New American Express cardholders get 20,000 bonus points when they spend £3,000 in the first three months, and the annual £195 fee is waived for the first year.

You get double points when you spend at airlines, plus four free airport lounge passes a year.

If you don’t end up flying, you can still cash in points for gift cards and other rewards. This includes using points to pay for eligible purchases on your card statement and shopping online at retailers such as John Lewis, Selfridges and Amazon.

After the first year, you might want to switch to another card rather than see any rewards eaten into by the £195 annual fee.

Best balance transfer card

If you have credit card debt that you haven’t paid off in full – meaning you’re at risk of racking up expensive interest charges – it’s worth considering a balance transfer.

These let you transfer credit card debt balances from elsewhere and give you a long 0 per cent period to pay off the transferred amount.

Many cards have a balance transfer fee, such as £3 for every £100 transferred. Others don’t but often come with a shorter 0 per cent period.

Make sure you pay off the balance within the 0 per cent period to avoid interest. If you don’t manage this, you could move the balance to another card when the 0 per cent rate expires.

You must make at least the minimum repayments otherwise you could be moved from the 0 per cent deal to a high standard credit card rate.

Our pick: For a long 0 per cent period, Barclaycard (barclaycard.co.uk) offers up to a 36-month balance transfer card with a 3.15 per cent fee – £3.15 for every £100 transferred.

There’s also a Barclaycard with a shorter 0 per cent period of up to 13 months but with zero balance transfer fee. You need to transfer within 60 days of opening an account.

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