Best credit card provider: Smile

If there's one quality that demonstrates a true winner, it's consistency. To win a consumer finance award once is an achievement. To win it three times in a row suggests that a company has not just got things right recently - but has, quite simply, got things right.

The award for best credit card for 2004 goes to Smile, the company that won the award in 2003 and 2002 in a notoriously disloyal marketplace where some borrowers are prepared to switch plastic cards on monthly basis as they search out the best deal.

Yet what Smile doesn't do is offer the lowest interest rate. The interest rate charged is 11.8%, which falls to 9.9% for Smile current account holders. On top of the low rate, however, Smile offers 0.5% cash back on all purchases. The card is available in standard or gold versions and offers up to 46 days' free credit.

Smile is an internet bank owned by Co-operative Financial Services and set up in 1999 as an alternative to traditional branch-based banking. It proudly points out that it was the first internet bank to be awarded the British Standard kite mark for internet security.

Security remains a key issue for customers, but Smile has focused just as much attention on service. For example, it offers a 24-hour telephone service centre that customers can use, for any reason, if they are unable to access the internet.

Mervyn Pedelty, chief executive of Co-operative Financial Services believes that it's this kind of service standard that has made Smile a triple winner in these awards. "We appreciate that credit card customers are looking for competitive products but we also understand that it is the Smile service ethos that has won us this award," Mr Pedelty says. "I think we offer a compelling proposition. We have a great set of products, services and rates; our credit card is secure; switching is made easy; and it is from a bank with a clear ethical stance."

Satisfaction with the Smile credit card was markedly higher than its nearest rivals in the consumer finance awards and, according to the company's own research, 94% of its customers would recommend Smile to their friends. The Co-operative's ethical stance - the organisation considers its investment decisions according to a range of ethical criteria and encourages the companies in which it invests to make improvements to their social and environmental conduct - may also be a significant factor in customer satisfaction.

Security and convenience

Gary Crompton, a chartered surveyor from Manchester, has been a Smile customer for almost five years since taking out a current account with the online bank. When he was looking for a credit card more recently, Smile seemed the obvious choice.

"The internet side of it is a big attraction to me," he admits. "I can juggle my finances around on the computer which really helps if you're not overly organised and never seem to have time to go to the bank.

"The Smile site is easy to use and seems pretty secure, which is a big issue for me. And when I've needed to speak to Smile, they've always given me a straight and uncomplicated answer."

A year in credit cards

· In August, the number of personal bankruptcies climbed to a record high as borrowers struggled with growing credit card debts. By March, credit card debts in the UK had reached ?11.9billion. · The Office of Fair Trading has been investigating high charges. After a Treasury select committee accused credit card firms of imposing excessive charges late last year, the OFT has written to eight card firms about their late-payment fees. · The battle against fraud continues. The banking industry is funding a ?3million a year anti-fraud police unit, set up to target organised gangs responsible for the majority of card crime. Plastic card fraud in the UK amounted to ?65million in 2003. · Credit cardspending on the internet has continued to rocket. One in 10 credit card transactions took place online in the second half of 2003, compared to one in 50 in 1999, according to the Association of Payments Clearing Services. · By the end of 2004, plastic cards are expected to have overtaken cash as Britain's most popular form of payment. There are now 246 plastic card transactions made in the UK every second.

Credit card tips

· If you don't clear your credit card debt in full every month then the right card for you is likely to be the one with the lowest charges. · If you do clear your balance each month the interest rate is irrelevant. Look instead for rewards, such as cashback, for using the card. The interest-free period is also relevant; some cards offer up to 56 days before payment is due. · If you have run up a large balance on your credit card it's worthwhile transferring to a lower rate, particularly to one of the many 0% interest rate deals on offer for transferred balances. However, if you have a large balance, check that the new card issuer will acccept it. · If you are using a store credit card or planning to apply for one, don't. They tend to be much more expensive than standard mainstream cards. · Using credit cards on holiday can be very convenient, but check what extra fees your card issuer may lumber you with. Some charge up to 3% for foreign currency transaction.