Types of Credit Card in the UK

There are a huge number of credit card providers operating in the UK and although all credit cards operate in much the same way, see Operation of a Credit Card, each company may offer a range of different types of credit card. These different cards are designed to meet the different needs and personal circumstances of customers. Each credit card will have slightly different features, and so it is important to understand the differences in order to decide which one to choose. The main types of credit card are: the standard credit card, the affinity card, the store card and the reward card. Although a charge card is not a credit card as such, it is very similar and offers a viable alternative, see Credit Card Alternatives, if you are conscious of your budget.

You are free to choose the type of credit card for which you apply, but some may be easier to obtain than others if you have a poor credit history. This is because some credit cards have more stringent criteria that must be satisfied before you can be approved. In contrast, if you have a good credit history and consider yourself able to manage several cards, there is no limit to the number of credit cards you can have. However, as card providers will run a credit check before they accept your application, they may be unwilling to offer you another credit card if you already have multiple cards. Alternatively, they may ask that you consolidate any outstanding balances on the credit card that they issue to you. Consolidating your balance effectively transfers any debt you have on other cards to one card. For more details see Debt Consolidation.


Payment Systems
Despite the numerous credit card providers operating in the UK, most will be backed by one of three large, international payment systems: MasterCard, VISA or American Express (AMEX). Your card provider will be associated with one or more of the three, and your card will have either a MasterCard, VISA or AMEX logo. MasterCard and VISA operate in essentially the same way. They do not issue credit cards themselves, but process the transactions between your credit card provider and the company from which you made a purchase. You never pay MasterCard or VISA for their service because you deal directly with your credit card provider.

AMEX is different. They issue credit cards themselves and you pay them or their affiliated companies directly. They offer exclusive benefits for members, but are only accepted in certain places. MasterCard and VISA currently offer twenty-four million locations worldwide where you can pay for goods and services.