There are two types of credit card user. Those who pay up their balance in full each month and those who cannot afford to do this. Let’s call the first type of credit card user a ‘transactor’ while the second type of credit card user we will call a ‘borrower’.

Around 50% of credit card users are transactors. If you often use your credit card for shopping and marketing but always pay up the balance in full each month, you avoid paying interest completely. Most credit cards offer an interest-free period of up to 59 days from the date of the purchase. This allows the time necessary to gather the cash before your payment is due. There are a few credit card contracts that do not offer any ‘free’ periods even if you clear your balance in full every month. Watch out for these!

For transactors, the interest rate is irrelevant. Instead they should look for deals that will reward you for spending. A number of cards offer reward schemes either in the form of cash back, charitable donations or loyalty points. Some are more generous than others so go for the card that gives you the best return on your spend.

If you can afford to clear you balance in full each month, but have a tendency to forget, or be late, making your payment, then set up a direct debit. This is the easiest way to guarantee you’ll always pay off your debt on time and avoid a penalty charge.

For borrowers who are unable or have no intention of paying off the credit card balance each month then the thing to look for is low standard interests rate or even a series of introductory offers and balance transfers. Zero interest rate periods can mean big savings for borrowers. It is wise for borrowers to cut down the interest they pay and it is wiser still to use the interest free period to pay off the whole balance if they can before the credit card balance reverts to interest rates around 20%.

It can of course be a time consuming and frustrating business to search for a new credit card deal every six months or so. This is made much easier for both transactors and borrowers if they use credit card comparison sites on the Internet.

Credit card comparison sites will give a lot of good advice and guidance when comparing the whole of the credit card market. For transactors all credit cards can be compared for the benefits they offer on things like, cash back or loyalty points. While for borrowers the interest rates and introductory offers are the important search criteria. Borrowers holding multiple credit cards can make further interest rate savings. For example, one credit card for zero percent on the borrowers balance transfer for example and a second card with the lowest available standard interest rate on spending.

For borrowers with an outstanding balance that they want to pay off the recommendation is to pay each month at least twice the amount of the minimum payment on the credit card statement. At the same time resisting any further use of the credit card.