Credit Cards: Time to be card sharp

HOW WOULD you like to have your favourite photo emblazoned on your credit card? Advertisers used to say that your choice of plastic said more about you than money; but your choice of photo could be even more revealing.

So let's give thanks to credit card company Capital One for this initiative.

More seriously, however, Capital One's range of cards could prove to be major savers. They currently charge the lowest rate on the market at 6.9 per cent, fixed until next April. Close behind is RBS Advanta's 7.9 per cent APR fix which has just been extended to July 1999.

Some 6.5 million people still hold a Barclaycard when it is one of the most expensive cards on the market. However, even Barclaycard has got in on the fixed rate deal by offering a less generous 18.9 per cent APR until the end of the year.

Other enticing introductory rates include American Express's new Blue Amex, Birmingham Midshires, Co-operative Bank, First Direct, GM Card, Lloyds Bank, and People's Bank Connecticut.

Of course, after the introductory period, you can expect rates to climb steeply again. The trick is to switch to other introductory deals or cheaper cards. Current winners include Alliance & Leicester's Diamond and Bank of Scotland's Visa both at 13.9 per cent APR, and Co-operative Bank's Advantage at 12.6 per cent APR.

Another good reason to switch cards is if you have debts elsewhere. Some card issuers - notably RBS Advanta and Barclaycard - send you up to four cheques when you take out your card. Ostensibly these are designed to clear existing credit card arrangements, but there's nothing to stop you clearing an overdraft.

If you plan to pay off a loan with a credit card cheque, check the redemption penalties. It could be a false economy if you have to pay a penalty fee to repay the loan early.