The best credit card in Britain

We reveal which credit card provider lovemoney.com readers think should be crowned The Best Credit Card in Britain for interest rates...

When it comes to choosing a credit card, the rate of interest should be a pretty big deciding point. After all, whether you're using your credit card for a balance transfer or for spending, you're bound to want to pay the lowest interest rate possible.

Here at lovemoney.com, we're regularly telling you which credit card is the best one for you, depending on your needs. And that's obviously what we're here to do.

But we also want to know what you, our readers, think. So we asked lovemoney.com readers how you rated your credit card provider in terms of the interest rate it offers. And here's how the results turned out...

Runners up

In third place, it's Virgin, which offers the market-leading 0% balance transfer credit card, the Virgin Money Credit Card. 

Why you gave this card a Cheer Award

Virgin Money offers an impressive 16 months interest-free on all balance transfers - the maximum time available.

So if you've got a lot of debt sitting on a credit card earning a lot of interest and you transfer your balance over to the Virgin Credit Card, you'll have 16 months in which to pay off your debt without worrying about paying interest.

What's more, you can also carry out money transfers, so you can transfer part of your credit limit straight into your current account. This means you can pay off an expensive loan or overdraft and still enjoy the same promotional 0% interest rate that you would on standard balance transfers.

Just bear in mind that you will have to pay a fee of 2.98% for standard balance transfers, and 4% for money transfers. And again, you need to try and pay off your balance in full before the 0% promotional period comes to an end. Otherwise, you'll be hit with an interest rate of 16.6% for standard balance transfers, and a whopping 20.6% for money transfers.

In second place

Claiming the title for first runner up is Sainsbury's, which offers another market-leading card: the Sainsbury's Finance MasterCard.

Why you gave this card a Cheer Award

The supermarkets have really started to up their game when it comes to financial products, and the Sainsbury's Finance MasterCard is definitely a card worth having in your wallet.

Here at lovemoney.com HQ, we're regularly banging on about a nasty trick called negative payment hierarchy. It's a trick adopted by the majority of credit card providers, and means that any payments you make will be allocated towards your cheapest debts first (such as promotional balance transfers), leaving the most expensive debts to rack interest for as long as possible.

One way to side-step this, however, is to use a credit card that has the same promotional period for balance transfers and purchases. And the Sainsbury's Finance MasterCard is the market-leading card to use for this. This is because it offers 10 months interest-free on both balance transfers and purchases.

Just bear in mind that a 3% fee will be charged for any balance transfer, and remember if you don't pay off your balance in full during the 10 month interest-free period, you will need to move your debt to another 0% balance transfer card, otherwise you'll be hit with an interest rate of 15.9% APR. 

If you're regular shopper in Sainsbury's, you'll also be pleased to hear that every time you shop in Sainsbury's with the Sainsbury's Finance MasterCard, you'll receive two Nectar points for every pound you spend in Sainsbury's for the first two years. So you'll double your Nectar points on every Sainsbury's shop!

You can find out more about this card in The top new all-round credit card.

The winner is...

Overall, the credit card provider that you voted as the very best in terms of the interest rate it pays is... The Co-op. So the Co-op wins the lovemoney.com 2010 Best Credit Card Interest Rate Award. Congratulations!

Why this card is the best

The Co-op offers a wide range of credit cards to suit various needs. For example, if you're not interested in being a 'rate tart' - in other words, you don't want to continually be shifting debt from one 0% balance transfer credit card to another - the Platinum Fixed Rate Credit Card may have the answer.

This credit card offers a fixed interest rate of 9.9% on both balance transfers and purchases for five years! So this means you'll have five years to start tackling your debt without worrying about paying a ridiculously high interest rate, or worrying that the interest rate could change after just one year. And this means you won't have the hassle of continually shifting your debt to another credit card - at least not until the five year period is up, when the rate becomes variable. There's no transfer fee to pay, either.

And because the card offers the same rate of interest for both balance transfers and purchases, you won't be stung by that nasty trick I meantioned earlier: negative payment hierarchy.

What's more, for no additional charge, you'll get £100,000 travel accident insurance, and you'll have 24 hour medical and legal assistance overseas as well as an emergency cash and card replacement service.

The Co-op is of course, an ethical bank. So if this is important to you, you'll be pleased to know that for every £100 you spend on the Platinum Fixed Rate Credit Card, the Co-op will donate 1.25p to its Customers Who Care campaign - at no extra cost to you. The Co-op campaigns on a range of issues from landmines to safer chemicals, climate change to trade justice.

However, if you're really keen on making the world a better place, you might prefer the Co-op's Think Credit Card. That's because from the very first time you use this credit card, you will help protect a third of an acre of Indonesian rainforest. What's more, for every £100 you spend on the card, the Co-op will donate 25p to RSPB's Indonesian Rainforest project.

Other benefits to the Think Credit Card include a 7% interest rate on balance transfers for six months from the date of each balance transfer. And you'll also receive an interest rate of 7% on purchases from the Co-op's ethical partners for six months after each purchase! Bear in mind that once this period is over, the interest rate will revert to 12.9%.

Do you agree?

So now you know which credit card providers are the best when it comes to interest rate, according to our poll. But do you agree? You can share your experiences with other lovemoney.com readers in the comment boxes below.

Finally, don't forget that if you need any help paying off your credit card debts, lovemoney.com can help. First, adopt this goal: Pay off credit card debts. Next, watch this video: The cost of credit card debt. And then, why not have a wander over to Q&A and ask other lovemoney.com members for advice?

More: Five easy ways to borrow money quickly | The best credit cards for 2010