Time to get savvy with your credit cards

Consumers may be struggling to make ends meet as the credit crunch continues to bite, but don't expect any sympathy from the credit card providers.

Card companies have been cleverly tweaking their terms and conditions to boost revenues by cutting interest-free periods, hiking cash withdrawal fees and increasing interest rates.

Some of the most recent changes saw the 0% balance transfer duration on the SkyCard slashed from 12 months to nine months, its 0% purchase period scrapped altogether and its typical rate increased from 16.9% to 17.9%.

MBNA increased the balance transfer rate on its American Express Rewards Card from 15.9% to 17.9% and hiked its cheque advance rate from 15.9% to 19.9%.

The Royal Bank of Scotland (RBS) also got in on the act increasing the typical rate on both its Platinum and Classic cards from 15.9% to 16.9%, with its balance transfer annual rate also increasing.

With Christmas around the corner and many families already struggling to cope with rising living costs, such moves aren't good news. However, there are still some great credit cards to be had, so it's time to ensure you're getting a good deal.

Which card is right for you?

Simply picking up the 'market leading credit card' won't necessarily be the best move for you - you should instead think about what type of user you are first.

If you pay off your balance in full¢¦

If you never have a problem clearing the balance completely each month, you should make your credit card work for you by earning cashback or rewards. The American Express Platinum Cashback offers 5% cashback for the first three months up to £4,000 and up to 1.5% thereafter, with a typical annual percentage rate of 18.9%.

Halifax also offers an attractive cashback card with 2% back on groceries and fuel and 0.5% on all other purchases. Its typical rate is 15.9%.

The Citi Shell MasterCard meanwhile is ideal for those who live near a Shell petrol station as it includes a 3% rebate on all Shell fuel spend and 1% on other purchases, with a typical rate of 16.9%.

If you want to pay off an existing debt¢¦

Give yourself the maximum period possible to chip away at your debts without paying additional interest with a 0% balance transfer card.

The market-leader is the Virgin Credit Card which offers 0% on balance transfers for 16 months with a typical rate of 16.6% and a 2.98% balance transfer fee.

The Capital One Platinum Card is also highly competitive, offering 0% on transferred balances until February 1, 2010 with a 3% fee and a typical rate of 15.90% while the Egg Card offers 0% until January 1, 2010 also with a 3% fee although its typical rate is higher at 16.90%.

The key however is to use these deals to pay off your debt only ¢ and not for additional spending.

If you want to transfer a balance and make purchases¢¦

If you do need to keep on spending while paying off an existing debt then you should take out a card with an equal 0% balance transfer and purchase period.

If you take out a card with a 0% purchase period that is much shorter than the balance transfer introductory offer then you'll begin accruing interest on all new purchases as soon as that period expires while your payments go towards the original balance.

This is known as the 'negative payment hierarchy trap.'

The Halifax One Online Special is also competitive with 0% on both balance transfers and purchases for 10 months with the same fee and typical rate.

If you want to use the card overseas¢¦

For overseas use, pay close attention to currency conversion fees and purchase conversion fees. There are several cards on the market that do not charge any fees for these services including the Post Office Platinum Card with a typical rate of 16.9%, the Abbey Zero Card with a typical rate of 18.9% and the Nationwide Gold Card which has the lowest typical rate at 15.9%.

Remember that with providers tightening their lending criteria the market-leading deals are only available to those with good credit scores.