What is a bank credit card?

Banks, building societies, supermarket chains and even certain airlines – it feels like you can get a credit card pretty much anywhere these days. But which card should you choose? Should you go with a card that gives you 0% balance transfers, cash back or rewards? Or look for one with the lowest APR?

 

With such a dizzying array of choice, it’s hardly surprising that so many people just stick with what they know – their own bank. Bank credit cards definitely have their advantages but also their disadvantages. So, what are they? And does it make sense to get one?

What is a bank credit card?

A bank credit card is one that’s issued by the institution that you bank with. That could mean the bank where you have your current account or perhaps, a building society where you have your mortgage.

Although current accounts routinely come with a debit card facility, you will not always automatically be given a credit card. Usually you’ll need to apply for one specifically.

Some financial institutions do however give their account holders major incentives to get a credit card with them. For example, they may offer exclusive credit cards that are just for their current account holders which could come with attractive reward schemes, cashback or 0% offers.

Is a bank card a credit card?

Not normally. The term ‘bank card’ usually refers to the card that’s issued to an account holder when opening their account. It could be an ATM card that allows the holder to take money out at a cashpoint) or it could be a debit card which is linked to their bank account and allows the holder to spend in shops or restaurants.

A credit card will allow you to make purchases by essentially borrowing money from your bank allowing you to buy things even if you don’t have the cash in your current account (just remember that you do have to pay it back, sometimes with interest!)

How do I decide whether to go with a bank credit card?

One of the main perceived advantages of getting a credit card through your bank is that you already have a relationship that’s been built up over the years. However, just because you have a relationship doesn’t mean you’ll be getting the best deal from them.

The key is research – it’s best to shop around to see which provider can offer the right credit card for your needs. It’s just important to make sure that you think your credit score is strong enough before you apply – so it's a good idea to (1) check your credit score, and (2) compare credit cards up front rather than making multiple applications.

The more places you apply for credit and are turned down, potentially the less likely you are to receive credit at all. It’s called a ‘rejection spiral’ because repeated applications (and refusals) can harm your credit score further.

So don’t just stick to your bank as you could be missing out on some fantastic deals.
It could pay to compare using a comparison site such as comparethemarket.com. You can see a range of different types of credit cards on offer and compare them with credit cards from your bank, too.

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