If you want a new Vauxhall, get a GM card. To make a donation to charity, get a Leeds Visa

But for cheaper borrowing, forget credit cards with perks

Credit cards are not all the same. Although most display the Visa or Access and MasterCard logos, conditions of use vary widely according to the issuing bank, building society or company.

Recent proliferation of co-branded and affinity cards has added to choice. It is now possible to get discounts on new cars, donate to charity, give to one's alma mater, support a favourite football team or join the Star Trek fan club. Latest into the fray is The Sun newspaper with its affinity credit card for readers.

While this may be conscience salving or just jolly good fun, the fundamental benefits and costs of owning a credit card can be obscured.

Mark Austin, marketing executive with Save & Prosper, reckons consumers have forgotten that credit cards are there to offer credit. Freebies put up the cost of borrowing and distort the nature of a credit card, he says.

The Robert Fleming/Save & Prosper card caters to those wanting to borrow cheaply. Some 80 per cent of its cardholders take extended credit compared with 50 per cent at Barclaycard. Its annualised interest rate (APR) of 14.6 per cent makes the cost of borrowing pounds 1,000 for one year pounds 138.80.

Royal Bank of Scotland's MasterCard has a lower APR at 14.5 per cent, but it gives no interest-free period so interest starts clocking up from the day of purchase. Its cost of borrowing pounds 1000 for one year works out slightly higher at pounds 145.71.

At the other end of the scale. the Co-operative Bank's Visa card charges 23.9 per cent a year, giving a cost on pounds 1,000 for a year of pounds 236.20.

The cost of credit cards depends on how they are used. Those who pay off bills in full every month will only pay the annual card fees if applicable. Fees range from nothing for the General Motors card to pounds 20 a year for the new American Express credit card.

Other cost factors include tiered interest, number of days of interest- free credit, waived annual fees if cardholders spend above a certain amount and fees for second cards. Some issuers, including the Leeds, offer lower rates of interest to those transferring balances from other credit cards.

Big spenders enjoy a better rate of interest from the TSB, Leeds and Amex. TSB Visa and MasterCard charge 21.9 per cent a year to borrowers spending less than pounds l,000 a year, but only 17.9 per cent to those spending more than pounds 2,500.

Bank of Scotland's Visa and MasterCard holders pay no annual fee if they spend pounds 2,000 on their card and Halifax Visa holders have their fee waived if they spend pounds l,500.

The number of days of interest-free credit is usually between 50 and 56 days, but RBS's MasterCard has no interest-free period. Most second cards are free, but Lloyds charges its Access cardholders pounds 6 for a second card.

So much for the costs. If you are not a borrower, or only very occasionally take extended credits, the perks count more. General Motors has proved consumers like incentives. Having launched in the UK in January last year, the GM Card now has more than 500,000 holders. Every pounds 20 charged to the card earns pounds l off a new Vauxhall up to pounds 500 a year. So far, more than 10,000 cars have been bought using credit card redemptions.

The Leeds Visa card has made it into the Guinness Book of Records twice for its charitable money raising efforts. By March this year, it had donated pounds 6.lm to three charities - the British Heart Foundation, Mencap and Imperial Cancer Research. Some 20p is donated for every pounds 100 spend on the card. In addition, those spending more than pounds l,500 a year on their card have their pounds 12 annual fee refunded or pounds 7 refunded and pounds 5 given to charity.

Barclaycard this year added Barclays Assist to its range of perks. It provides legal, roadside and domestic assistance, down to finding a number for a local plumber if the cardholder's pipes burst. Barclaycard believes such free extras appeal strongly to consumers.

Usability is the final vital ingredient of any credit card. Visa claims 12 million retail outlets take its card in more than 200 countries. MasterCard boasts 12.3 million and Amex comes in at 3.9 million. A spokeswoman for Amex said problems with retailers shunning the Amex charge card because of the high cut it exacted were in the past. Amex has reduced the amount it takes from retailers.

Availability of holes in the wall is not an issue in the UK as few people use credit cards for withdrawing cash. Interest rates charged on cash withdrawals are usually higher than on purchases and cash handling charges of 1.5 per cent are standard. Amex's annual interest rate on cash is highest at 26 per cent. RBS MasterCard charges the least at 14.5 per cent.

Charging procedures also vary. Barclaycard and NatWest both give a 56 day interest-free period on cash withdrawals, but if the bill is not cleared, Barclaycard charges interest from statement date and NatWest charges from date of cash withdrawal.

Despite cost, credit cards can be useful for obtaining cash abroad. Visa has 160,000 cash dispensers world-wide, MasterCard 128,000 and Amex 90,000.

Credit cards have very different costs and benefits depending on use. Chronic borrowers should aim for the lowest interest rate. Prompt payers should pick perks with care.

Six of the best How the cards compare

BARCLAYCARD

Barclaycard (Visa and Mastercard) has 6.5 million holders. pounds 10 annual fee. 22.9 per cent interest on unpaid balances. Ford discount scheme. Borrowing pounds 1000 for a year, including card fee, costs pounds 226.99.

GM CARD

GM Card (Visa and Mastercard) is the fastest-growing card. There is no annual fee and interest is charged at 20.9 per cent. Every pounds 20 spent earns pounds 1 of the price of a new Vauxhall up to pounds 500 a year. Borrowing pounds 1000 for a year costs pounds 209.83.

NATWEST

NatWest (Access and Visa) is the UK's second-biggest card. Annual fee of pounds 12 and interest at 23.4 per cent. Every pounds 20 earns an Airmile. It also offers travel accident insurance. Borrowing pounds 1000 for a year, including card fee, is pounds 231.87.

LEEDS

Leeds (Visa) gives most to charity - 20p for pounds 100 spent. Annual fee pounds 12. Interest 20.87 per cent if pounds 1,500 is spent each year. Holiday discounts and accident insurance. Borrowing pounds 1000 for a year, including fee, costs pounds 206.

ROBERT FLEMING

Robert Fleming/Save & Prosper (Visa) is the cheapest for borrowing but there are no perks. It charges a pounds 12 annual fee and interest at 14.6 per cent. Borrowing pounds 1000 for a year, including the card fee, costs pounds 138.80.

AMERICAN EXPRESS

American Express. pounds 20 annual fee waived in first year. Interest (including fee) 20.2 per cent if pounds 1,000 spent each year. Points toward travel, hotels and entertainment. Purchase protection. Borrowing pounds 1000 for a year, including fee, costs pounds 187.65.