Loyalty credit cards: who is charging what?

There is an ever-increasing array of charge cards, store cards, credit cards and reward cards, so, what is happening and how do you pick your way through it?

The recent crowding in the UK credit card market has led to competition on a number of fronts: offering the lowest interest rate; providing introductory offers and balance transfers; and giving out incentives such as cashback and reward points.

At the same time there has been a proliferation of store cards, which are essentially credit cards that you can use in specific retail chains, and reward cards, which earn you vouchers according to how much you spend in store.

The boundaries between these cards are now becoming blurred. Instead of handing over a reward card and a credit card when you come to pay in M&S, you now simply hand over the "&more" card. You even get bonus points when you buy outside the store, and you can withdraw cash from a cashpoint. Sounds great? Just watch out for the interest rates.

We looked at a range of cards and compared the interest rates they charge for retail purchases and cash withdrawals.

Top of our list comes the Cooperative Bank's credit card, although it requires you to have an income of over ?15,000, while the M&S card charges middling rates for cash and retail.

John Lewis charges a competitive rate, beating the standard Barclaycard, but it is still no match for the rates on a Smile card. While, shockingly, Debenhams is getting away with charging 32% APR for cash withdrawals.

Of course there are advantages to different cards in terms of in-store discounts, late night openings and special invitations. You must decide which offers appeal depending on where you shop and how good you are about paying off balances. Unless you pay off quickly you will find yourself paying high prices for such perks. If you sign up for a store card for the sake of a quick 10% discount, do not get trapped into using it as your main credit card without checking out the interest rates and if you are tempted to get cash out... don't.

Such considerations aside, here is our selection of cards along with the APRs they charge:

Cooperative Bank Fixed Rate Gold Visa card
Retail purchases: 9.9% APR
Cash withdrawal: 10.8% APR

Smile Visa card
Retail purchases: 10.5% APR
Cash withdrawal: 15.2% APR

John Lewis account card
Retail purchases: 13% APR
Cash withdrawal: 17% APR

Egg card
Retail purchases: 13.9% APR
Cash withdrawal: 16.3% APR

Marks & Spencer &More card
Retail purchases: 14.9% APR
Cash withdrawal: 18.9% APR

Barclaycard
Retail purchases: 14.9% APR
Cash withdrawal: 19.3% APR

Harrods MasterCard (by invitation)
Retail purchases: 16.9% APR
Cash withdrawal: 19.2% APR

Recognition FraserCard
Retail purchases: 29.5% APR (27.5% when paid by direct debit)
Cash withdrawal: 31.3% APR (29.5% when paid by direct debit)

Debenhams account card
Retail purchases: 29.9% APR (28% when paid by direct debit)
Cash withdrawal: 32.0% APR (30% when paid by direct debit)

· APRs quoted are typical values only and may be variable.