Best Credit Cards in the UK 2025: Balance Transfer and Cashback Options Compared
Credit card interest rates remain high in 2025, with many UK households looking for ways to reduce debt costs or earn value on everyday spending. Balance transfer cards can help cut interest charges during the cost-of-living squeeze, while cashback cards offer small but steady returns. This guide compares the main options available across the UK and what to consider before applying.
How Balance Transfer and Cashback Cards Work
Balance transfer cards allow you to move existing credit card debt onto a new card offering 0% interest for a set period. You still repay the balance, but interest doesn’t build during the promotional window.
Cashback cards reward you for spending, normally as a percentage credited back to your account. Rates vary depending on the provider and category of purchase.
Key Features to Compare in 2025
Balance Transfer Cards
- Length of 0% period: Typically 20–30 months.
- Transfer fee: Often 1.5–3.5% of the transferred amount.
- Representative APR after promo: Around 24–29% variable.
- Minimum credit score: Mid to high, depending on provider.
Cashback Cards
- Base cashback rate: Usually 0.25–1% on general spending.
- Intro rates: Some offer 5% for the first few months.
- Annual fee: Often £0–£25; premium cards may charge more.
- Monthly spending requirements: Some cards require regular use to earn full rewards.
Notable UK Options in 2025
Providers frequently update offers, but these are typical examples of what UK residents can expect:
Balance Transfer Examples
- Barclaycard Platinum: Long 0% period, mid-range transfer fee.
- Virgin Money Balance Transfer Card: Competitive promo periods with app-based management.
- Halifax Balance Transfer Card: Lower fees on shorter 0% terms.
Cashback Examples
- American Express Platinum Cashback Everyday: No annual fee, higher intro rate, good for regular spenders.
- Chase UK Debit + Credit ecosystem: Occasional promotional cashback, strong app tools.
- Barclaycard Rewards: No fees abroad and a flat cashback rate.
Always check each provider’s current APR and acceptance criteria, as these can change throughout the year.
Costs, Limits and Eligibility
- Balance transfer fees: £15–£70 on a £2,000 transfer, depending on fee percentage.
- Interest-free periods: 18–30 months for transfers; 3–6 months for purchase offers.
- Annual fees: £0–£25 for most cashback cards.
- Credit checks: All cards require affordability assessments under FCA rules.
Common Restrictions
- You may not transfer balances between cards from the same provider group.
- Missing a payment can end the promotional interest period.
- Cashback may not apply to cash withdrawals, gambling or government payments.
Pros, Cons and What to Watch Out For
Balance Transfer Cards
Pros
- Can significantly reduce interest payments.
- Useful for consolidating debt into one monthly payment.
Cons
- Transfer fees add up on large balances.
- High APR after promo ends if balance remains.
Cashback Cards
Pros
- Earn value from everyday spending.
- Most have no annual fee.
Cons
- Rewards shrink if you carry a balance and pay interest.
- Intro offers can drop sharply after the first few months.
Watch out for:
- Using a cashback card for debt when interest outweighs rewards.
- High credit utilisation lowering approval chances.
- Foreign transaction fees unless the card explicitly removes them.
Example Scenario
Case: Manchester resident with £1,800 credit card debt
They choose a 0% balance transfer card offering 24 months with a 2.5% fee (£45). Paying £75 per month clears the balance before the promo ends, saving more than £400 in interest compared with a standard APR of 25%.
Case: London commuter spending £900 per month on groceries and travel
A cashback card averaging 1% returns around £9 per month (£108 per year). A card with a £25 annual fee might still be worthwhile if its higher cashback rate exceeds the cost.
FAQ
1. Can I get both a balance transfer and cashback card?
Yes, many people use one for debt management and another for spending.
2. Will applying for multiple cards hurt my credit score?
Each application creates a hard search, which can temporarily lower your score.
3. Can I transfer a balance from a store card?
Usually yes, as long as it’s not from the same banking group.
4. Do cashback cards offer rewards on all spending?
Most exclude cash transactions, gambling and government services.
5. Are 0% balance transfer deals getting shorter in 2025?
Some providers have trimmed offers slightly due to higher base rates, but long options remain available.
6. What credit score do I need for a top-tier card?
Typically a good to excellent score, but affordability checks matter just as much.
Conclusion
Balance transfer cards offer a practical way to reduce debt costs during a period of high interest rates, while cashback cards provide steady value on everyday spending. The right choice depends on whether you want to clear existing balances or optimise your monthly spending. Comparing terms, fees and eligibility criteria from several providers helps ensure the card you choose delivers real value in 2025.
References
- FCA: Credit Card Regulations and Responsibilities
- Bank of England: Base Rate Announcements
- ONS: UK Household Spending Trends
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