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Who is my flexible friend?

Some have one, most have a few. Our ongoing love affair with credit cards shows no sign of dwindling.

But with so many different credit cards on the market how do you know which one is best for you? Firstly, you should identify the type of spender you are and how you intend to make your repayments.

I pay my credit card bill off every month. The Annual Percentage Rate (APR) is not very important as you'll never be paying any interest. You should try to get a card with no annual fee that offers some kind of loyalty bonus like cashback, Nectar points or air miles.

I only pay off some of my bill each month. If you can't clear your bill then a card that offers a fixed, low APR is a good option which will make budgeting easier. You will probably have to pay an annual fee to guarantee the low APR.

I have run up a large credit card bill and have some large purchases looming.Look for a card that offers 0% APR on balance transfers and/or purchases. Or consider using the card for a one-off purchase maybe for a holiday or furniture. There are a number of things to watch out for with these types of card. The 0% APR will usually be an "introductory offer" for a limited period (say 6 to 9 months) and any remaining balance or new purchases after that will revert back to the card's standard rate, which can be on the high side. Watch out for any fees that credit card companies charge on balance transfers. This will vary from card to card, but is usually a set percentage of the balance you are transferring. As long as you pay off the balance before the introductory offer ends then these cards are a great way of cutting your interest payments. But don't despair if you haven't managed to clear your balance. Just remember to swap to another card offering another introductory offer. Be aware though that credit card hopping may affect your credit rating.

Even when you've identified what type of spender you are, there are more choices to be made. To help you further, you might like to consider:

• A card that makes donations to a charity every time you use your card. This might lessen the guilt of buying that "must have but don't really need" item.
• If you travel regularly then look for a card that offers air miles or free travel insurance.
• If you're going to make a large electrical purchase, look for a card that offers insurance in case of breakdown or theft.
• Checking the APR which can be very high. If you're trying to reduce your borrowing it might be cheaper to take out a loan and cut up the card.

Make sure that whichever credit card company you choose is reputable. Do your research - do you know anyone who has a card with this issuer? Check to see whether the card provider has signed up to a credit card verification scheme. Those that have will require you to enter additional security information to complete online transactions.

Remember it's important to keep up your regular payments of at least the minimum amount, otherwise your credit rating could be affected. This would reduce your future borrowing options.

If you're having difficulty meeting your monthly payments speak to your credit card provider to agree a repayment plan.

Don't fall for any gimmicks. If the offer seems too good to be true then it probably is.

Thisismoney is a good place to start looking for the most suitable card for you. 

Source: Time For Money