We know that finding the best credit product for your circumstances can be incredibly confusing, especially since there are so many options and a lot of the financial jargon can be unclear.

Used responsibly, credit products can be a useful tool to help you stay on top of things. That’s why we’ve outlined the different types of credit product here, so you can see which one can help you reach your money goal.

Taking out a credit card and using it sensibly is a great way to boost your credit score over time. If you pay back your balance in full and on time each month, you can show lenders you’re managing credit responsibly. This will be reflected in your credit report and score.

A credit builder credit card is specifically designed for people who have a lower credit history or very little credit history. If you’ve not used credit in the past, you’ll have little credit history on your report, which will prevent you from having a high credit score.

You can use a credit builder card to build up a pattern of good borrowing behaviour, which will help you show potential lenders that you're a reliable person to lend to. Credit builder cards typically carry a high representative APR, so remember to keep a close eye on how much money you’re spending so you can afford to pay your balance in full each month.

Got card debt to repay?

If you’re paying interest on your credit card, you could save yourself money by transferring your current balance onto a 0% balance transfer credit card. This will allow you to repay your debt at 0% interest for the initial 0% offer period. There’s usually a transfer fee, charged as a percentage of the balance you move, but it can help you save much more in the long run.

Fee-free balance transfer cards also exist, but they usually have a shorter interest-free term. Generally, the bigger the balance you need to transfer, the longer the interest-free period you’ll need.

Remember, when the 0% interest period ends, the interest rate will increase, so you’ll be better off if you pay back your debt as quickly as possible. If you still have an outstanding balance to pay off when the 0% interest period ends, you could save on interest by moving your balance to a new 0% balance transfer card.

Stuck in your overdraft?

Money transfer cards can be a simple way to cut the interest you’re paying on an overdraft and clear the overdraft balance reported on your credit file. The overdraft facility itself will still show on your report for as long as the account stays open. If you are stuck in your overdraft and often go beyond your overdraft limit, this will have an impact on your credit score.

A 0% money transfer card can be useful to pay off your overdraft in full. For a fee - often higher than a balance transfer fee - you can ask the lender to transfer the amount needed to clear your overdraft directly to your bank account. You can then pay off the card balance in instalments at 0% interest for a set amount of time.

Managing your card repayments responsibly can help you look after your credit score, though the effect varies by person. If you decide to take out a money transfer card, remember to ask the lender to directly transfer the money to your bank account. Never withdraw the cash from your money transfer card at a cash machine as this can be incredibly expensive.

Paying off several debts?

If you are struggling to keep track of your monthly repayments, you might find a debt consolidation loan helpful. This allows you to move your different debts into one place. By having one loan to cover the whole amount you owe you might find it much easier to keep track of your debts. This is because you’ll be making one repayment a month, instead of managing several debts with different rates.

A debt consolidation loan can also help you to pay off your debt faster if you can find a deal that offers a better interest rate than what you are currently being charged. Use our debt consolidation calculator to check whether you can save money by switching to a debt consolidation loan. Remember to consider all the factors when thinking about a consolidation loan: the interest rate, any associated fees, and your personal circumstances.

Looking for rewards when you spend?

A reward card works just like any other credit card, except that you earn points every time you use it. Using a reward credit card to cover your everyday spending, like food and fuel, can allow you to enjoy the benefits of air miles or store vouchers.

Cashback cards give you money rewards on your purchases. Most pay back around 0.25% to 1% of what you spend, so if you use them wisely, you can build up a nice stash. Don’t be fooled into spending more money than you need to just to reap the rewards, though. This can backfire if you’re unable to pay back the balance on time.

It’s important to try to pay off your balance in full each month, as reward cards and cashback cards charge notoriously high interest rates. Paying a high interest rate will likely wipe out any benefits you might get from using the card in the first place. Also, bear in mind that you can receive a penalty if you go over your credit limit.

Want to spread out the cost of a big purchase?

A purchase credit card can help you spread out the cost of an expensive item over many months, at low or even 0% interest. These cards are popular with people who want to splash out on new furniture, a kitchen or a holiday but can’t afford the cost upfront. Just make sure you understand all the charges before you apply and remember to stay within your credit limit as you use the card.

It’s essential that you check how long the initial low or 0% interest rate term lasts for on your purchase card. Once it ends, your interest rate will jump up. It’s important to try to pay off your balance before that point, otherwise you’ll likely be charged a high interest rate. If you still have an outstanding balance to repay at that point, you could save money on interest by moving it to a 0% balance transfer card.

Planning to spend money abroad?

If you’re planning to travel abroad this year or you regularly spend money on foreign websites, a travel credit card might be a good option for you. They’re a handy way to avoid transaction fees, cash withdrawal fees and interest charges.

Usually, when you buy something abroad on a regular card, your bank will charge you a fee to convert the cost into GBP. This fee depends on your card’s payment network exchange rate and what has been agreed with your bank. A travel card can reduce or remove those conversion fees, but check what your card charges before you travel. Check your card’s terms before you travel: some travel cards charge no cash withdrawal fee abroad, others charge a small fee, and with most cards interest is charged from the day you take the money out.

Now you know what type of credit product is suitable for your needs, you can check your personalised offers on ClearScore. We show you your eligibility for each product, so you can see how likely you are to be approved if you apply. You might be pre-approved for some offers, which means your application is very likely to be approved, provided the information in your ClearScore account is up to date and you pass the lender’s checks.

ClearScore is a credit broker, not a lender, and works with a range of lenders and other credit brokers rather than exclusively with one. Your ClearScore score is an indication; lenders use their own criteria and may score applications differently.

Viewing your offers on ClearScore won’t damage your credit score, so you can check your offers as often as you’d like.

Credit product FAQs

Is it better to cancel unused credit cards or keep them open?

In most cases, keeping them open helps. An unused card adds to your total available credit, which lowers your credit utilisation, and older accounts lengthen your credit history - both of which lenders view positively. Close a card if it charges an annual fee you're not benefiting from, or if having it available tempts you into spending.

What's the biggest killer of a credit score?

Missed and late payments. Payment history is the single largest factor in how lenders assess you, and a missed payment can stay on your credit report at Experian, Equifax and TransUnion for six years. Defaults, County Court Judgments and bankruptcies do more damage still. Setting up a direct debit for at least the minimum payment protects you against the most common cause of score damage.

Should I close my old card after a balance transfer?

Not necessarily. Leaving it open keeps your available credit high and your utilisation low, which supports your score. The risk is running the old card straight back up while still repaying the transferred balance. If you don't trust yourself with it, keep the account open but remove the card from your wallet and any saved payment details.

How many credit cards is too many?

There's no fixed number. What matters is whether you can manage the repayments and how much of your available credit you're using. Two or three cards, all repaid on time with low balances, look better to lenders than a single card that's constantly near its limit. Opening several in quick succession is the bigger problem.

Can I really improve my score in 30 days?

You can move it, but expectations should be realistic - jumping to a specific target such as 700 in 30 days isn't something anyone can promise. Quick wins include registering on the electoral roll with your local council, correcting errors on your report and paying balances down before your statement date to reduce utilisation. Rebuilding after missed payments or defaults takes months, not weeks.

Does having several types of credit help or hurt my score?

A mix of credit - a card and a loan, for example - can help, because it shows you can manage different kinds of borrowing. It's a minor factor compared with payment history and utilisation, though, so it's never worth taking out credit you don't need purely to diversify.

Can I use a 0% purchase card for a balance transfer, and vice versa?

Sometimes, but the promotional rates rarely carry across. Many cards offer both features with different terms - for example 0% on purchases for a short period and a separate, longer 0% on transfers with a fee. Check the specific offer before you apply, because using a card outside its intended purpose often means paying the standard rate.

How to choose when more than one product could work

Most people don't fall neatly into one category. You might have card debt and an overdraft, or want rewards while saving for a big purchase. When more than one product could work, decide which credit card is best for you by working through the following five steps in order.

• Step 1: Decide whether this is about clearing debt or funding new spending. Existing debt points you towards a balance transfer card, a money transfer card or a consolidation loan. New spending points you towards a purchase card, a reward card or a travel card. If you're doing both, deal with the debt first - the interest you're already paying almost always costs more than any reward you could earn.

• Step 2: Work out whether you can realistically repay within the 0% window. Divide the balance by the number of promotional months. If that monthly figure fits your budget, a 0% card may be worth considering. If it doesn't, the balance will still be there when the rate jumps, and a fixed-term loan with a predictable repayment may be worth comparing.

• Step 3: Compare the total cost, not the headline rate. A card with a longer 0% period and a 3% transfer fee can cost more than a shorter deal with a 1% fee if you'd clear the balance quickly either way. Add the fee to any interest you expect to pay after the offer ends, then compare that total across the options you're considering.

• Step 4: Match the product to your credit profile. The longest 0% deals go to applicants with strong credit histories. If your score is still in Let's start climbing (0-409) or Moving on up (410-519), a credit builder card you're likely to be accepted for is more useful than an application for a market-leading offer that gets declined.

• Step 5: Weigh a card against a loan. A loan gives you a fixed monthly repayment and a fixed end date, which suits larger amounts and anyone who finds flexible credit hard to control. A card gives you flexibility and, with a 0% deal, potentially no interest at all - but only if you keep to your own repayment schedule.

Two worked examples

An overdraft plus card debt. Say you owe £1,200 on a credit card and you're £800 into your overdraft. A money transfer card can clear the overdraft, while a balance transfer card handles the card debt - but two applications close together isn't ideal. If one lender offers both features on a single card, that's usually the cleaner route. If the combined total feels unmanageable, a consolidation loan covering both puts everything on one fixed repayment.

A big purchase while rebuilding your score. If you need a new washing machine but your credit history is thin, a market-leading 0% purchase card may be out of reach. A credit builder card used for the purchase and repaid over a few months costs more in interest, but it builds the record that gets you a better deal next time. Check your eligibility before applying either way.

When none of these is the right answer

If you're already struggling to meet minimum repayments, taking on more credit rarely helps. Free, impartial debt advice is available from not-for-profit organisations such as StepChange, National Debtline and Citizens Advice, and speaking to them early gives you more options than waiting until payments are missed.

Applying for credit without damaging your score

Choosing the right product only pays off if the application itself doesn't set you back. Applying for credit leaves a mark on your credit report, and how you space those applications matters as much as which product you pick.

Soft search versus hard search

A soft search checks your details against your credit file without leaving a footprint other lenders can see, and it doesn't affect your score. Eligibility checks and offer comparisons use soft searches, which is why you can run them as often as you like. A hard search happens when you formally apply. It's recorded on your report, visible to other lenders, and can nudge your score down slightly.

Why several applications in a short window are a red flag

One hard search has a modest effect. Several in quick succession suggest to lenders that you're either being repeatedly declined or urgently need money, and both readings make them more cautious. Applying for credit you haven't checked your eligibility for first is one of the most common self-inflicted setbacks - alongside missed payments and defaults, which remain the biggest killers of a credit score by some distance.

What the 2/3/4 rule for credit cards actually means

The 2/3/4 rule is an informal guideline linked to a small number of US card issuers: no more than two new cards in 30 days, three in 12 months and four in 24 months. It has never been a formal or universal standard, even in the US. It is not a UK-wide rule, and no UK regulator or credit reference agency applies it. UK lenders each set their own internal limits on how many recent applications or accounts they'll accept, and those criteria aren't published. The useful takeaway isn't the specific numbers - it's the principle that clustering applications together reduces your chances of acceptance.

How long applications and rejections stay on your report

Hard searches typically stay visible on your credit report for around 12 months, though most lenders weight the most recent few months most heavily. Rejections themselves are not recorded - lenders see the search, not the outcome - but a run of searches with no new account opened tells its own story. Accounts you open stay on your report for six years after they're closed and settled.

If you're declined

Reapplying straight away almost always backfires, because it adds another hard search without changing anything the lender objected to. Instead, ask the lender for the reason, check your report for errors or outdated information, and give it a few months of on-time payments before trying again. Applying to a product better matched to your profile is more productive than reapplying for the same one.

What pre-approval and eligibility checks do and don't guarantee

An eligibility check gives you a percentage likelihood of acceptance based on a soft search - helpful for narrowing your options, but not a decision. Pre-approval goes further: the lender has already assessed you against its criteria and expects to accept your application, provided your details are up to date and you pass its final checks, including affordability and fraud screening. Neither replaces the lender's full assessment, but both let you apply with far more confidence and far fewer wasted hard searches.

Credit products at a glance: which one matches your goal?

If you're wondering how to decide which credit card to choose, start with the goal rather than the product. The table below summarises the seven main options, what each one is designed to do, and what it typically costs. Every product is explained in full in the sections that follow.

Eligibility varies from lender to lender - as well as your score, lenders weigh factors such as income, existing borrowing and affordability - and headline offers go to the strongest profiles. Check your personalised offers with ClearScore (a credit broker, not a lender) before you apply to see how likely you are to be accepted for each product.