How We Score Credit Cards

Mintify has developed a data-informed, proprietary credit card rating system that allows us to score cards based on how well they serve the needs of different types of UK consumers. This system is designed to evaluate value through the lens of various consumer priorities, whether it be transferring balances to minimise the cost of borrowing, extending the duration for purchase payments, accruing rewards from expenditures, or seeking greater financial flexibility. This rating system does not include credit cards for business use which is covered separately.

Data over opinion

While we value opinions, expertise and intuition, we value the data above all else. We commit to publishing only research-backed, data-rich content, free from inherent bias or conflict of interest. This approach allows us to operate with complete transparency.

On that basis, this article provides a detailed breakdown of our card rating methodology. This includes an in-depth look at the specific criteria used for each card category and an explanation of how various card features are quantitatively weighted. This ensures that consumers are provided information which is based on reliable, data informed assessment criteria.

Research & database design

To score cards based on their position relative to others in their category, we first built a UK credit card database containing over 13,000 datapoints for over 130 credit cards available in the UK. We obtained this data from credit card issuers’ websites and the financial institutions directly. This data was then cleaned and preprocessed to remove duplicates, handle missing values, and normalised. Each credit card record was then assigned a primary category based on our assessment of its most common use case.

Categories & weightings

Our analysis of the primary use cases of all cards in the database produced seven primary card categories:

  1. Balance Transfer
  2. Cashback
  3. Credit Building
  4. Low Interest
  5. Purchases
  6. Rewards
  7. Student

As an example, cards that are primarily marketed as Balance Transfer cards are assigned a primary category of Balance Transfer, even if they also offer a 0 percent introductory APR on purchases.

Key factors that influence the quality and appeal of a credit card were captured by consulting with experts in this field. These factors can, and do, vary based on user needs and card category, but commonly include:

  • Interest Rates: Lower interest rates are generally preferred.
  • Annual Fees: Cards with lower or no annual fees are often more attractive.
  • Rewards and Benefits: Includes Cashback, Points, Travel rewards, etc.
  • Credit Limit: Higher credit limits can be more useful for some users.
  • Introductory Offers: Such as 0% interest periods, bonus rewards, etc.
  • Customer Service: Quality of support and service.
  • Fees & Charges: Lower fees are preferable including those who travel or make purchases in foreign currencies.
  • Security and Fraud Protection: Quality of security measures in place.

These factors were weighted by level of importance and scored based on a representative model of the average UK credit card holder and their spending behaviour. This model was based on publicly available data obtained from the Office of National Statistics.

The 5 star rating

The ratings for each factor were scored on a scale from 1 to 5. This scale provided an overall rating, calculated as the average of these individual factor ratings. Considering the average nature of the value, we decided to include one decimal point. Therefore, the final score is presented in a format like X.X/5 stars, where 5 is the highest possible score and 1 the lowest. We categorized the cards into segments and indicated each segment’s percentage of the total. This approach illustrates the position of each card relative to the entire database. The values at the time of publishing this article were as follows:

Visual Rating Rating Score Range Rating Description Segment Percentage of Total
Outstanding 4.5 or higher Outstanding Top Range 4.58%
Very Good 4.0 to 4.4 Very Good Upper-Middle Range 22.90%
Good 3.5 to 3.9 Good Middle Range 31.30%
Average 3.0 to 3.4 Average Lower-Middle Range 22.90%
Below Average 2.9 or lower Below Average Bottom Range 9.16%

Dynamic data

During this process, we invested equally in building technology solutions that would allow us to easily and regularly update this database, providing our customers with a tool that delivers dynamic product data rather than a static view of a single point in time.

Scoring methodology by card category

We have designed unique scoring methods for certain categories based on the factors most relevant to someone looking for a card in that category.

Rewards & Cashback

A rewards or cash back credit card’s overall rating is determined primarily by its ‘spend to value’ score. This calculation has been designed to provide an indicator of how much value the average cardholder is likely to receive via the cashback or rewards earned from regular spending and whether those earnings are enough to justify the card’s cost.

Scoring methodology & weightings:

There are four assessment calculations used to determine a Rewards or Cashback card’s overall rating. The value of each calculation carries a weighting according to their overall importance in determining customer value.

  1. Spend to Value (60% of total score)
  2. Interest Rates (20% of total score)
  3. Customer Service (10% of total score)
  4. Fees and Charges . Which cards offer more favourable fee structures. (10% of total score)

Each category contributes a percentage to the overall score. For instance, if a card scores 4 stars in Interest Rates, it receives 4 x 20% = 0.8 points towards the total score. The sum of these points forms the final rating, with a maximum of 5 stars.

Example:

  • Spend to Value: 4 stars (2.4 points)
  • Interest Rates: 3 stars (0.6 points)
  • Customer Service: 4 stars (0.4 points)
  • Fees& Charges: 2 stars (0.2 points)
  • Total Score = 2.4 + 0.6 + 0.4 + 0.2 = 3.6 stars

Spend To Value (60% of total score)

While ranking some card features like annual fee and average APR is simple, other factors require us to make more complex calculations, including average rewards rate, estimated rewards earnings and any introductory offer value. We use consumer spending data from the Office for National Statistics (ONS) to obtain a reliable metric of people’s spending habits in the UK. The most recent ONS data estimates an average weekly household expenditure of £528.80 (£27,497.60 per annum).

Using this baseline, we calculate a value called “qualifying_spend” which provides an indicator of which purchases are likely to be put on a credit card and earn rewards. After removing expenditures like housing, fuel and power, transport and other expenditure items, we assume an average annual “spend” of £15,267.20. To create a comprehensive measurement system, we assume this spending is spread across various categories that are typically relevant for credit card rewards and cashback schemes.

Spending Categories:

We allocated the average spending of £15,267.20 across different spending categories. We based these calculations on averages obtained from the ONS using average household expenditure for all households.

  • Groceries: 30%
  • Dining: 8%
  • Travel: 17%
  • Entertainment: 15%
  • General Purchases: 30%

The ‘Spend to Value’ calculation

The process for calculating this value is as follows:

1. Rewards/cashback calculation:

For each card, we calculate the potential rewards or cashback earned based on the spending in each category and the card’s rewards/cashback rates.

2. Account for introductory offers:

Include any additional value from introductory offers in the first year.

3. Subtract fees

Deduct the value lost from any annual or monthly fees.

4. Sum Total

Calculate the net value the card provides after accounting for all factors.

Using this data, we assign each card with an estimated ‘spend to value’ expressed in terms of net cashback/rewards value (£) after accounting for any account fees (i.e. for every pound spent, how much monetary value is returned). This valuation allows us to estimate a card’s average annual rewards earnings (the £ to £ value derived from how many points, miles or cash back you’d earn with a given card if your spending was about average and you used the card for all of your purchases, as well as what those rewards are worth after factoring in annual fees). We also use these valuations to determine a card’s sign-up bonus value.

Examples:

Example Credit Card 1

Introductory reward value calculation: £112.50
Account fee: £195.00
Additional rewards from spending calculation: £68.70
Spend to value calculation: -£13.80

Example Credit Card 2

Introductory cashback value calculation: £22.50
Account fee: £0.00
Additional cashback from spending calculation: £73.70
Spend to value calculation: £96.20

Interest Rates (20% of total score)

When we consider interest rates (APR) within the context of the Rewards and Cashback category, given that these cards have been designed to accrue rewards from spending, we look primarily at the purchases APR in three ways:

  1. The value of any introductory rate,
  2. the length of the promotional period, and
  3. the standard purchases rate attached to the card.

We establish thresholds for what constitutes a 1 to 5-star rating in terms of APR by dividing the values into quintiles, with the lowest APRs receiving 5 stars and the highest APRs receiving 1 star.

Customer Service (10% of total score)

We adopted a simple but effective approach to evaluate credit card customer service in the UK, utilising a quintile-based, 5-star rating system. This methodology is focused on simplicity, ensuring that the results are both accessible (consumers can easily check the same data sources) and meaningful for consumers and industry stakeholders alike. By leveraging data from “Which?” and “Trustpilot”, we provide a snapshot of customer service performance across different credit card providers.

  • Which?: This is a well-known consumer rights organisation that often conducts surveys and studies on customer service in various sectors, including banking and credit cards.
  • Trustpilot: This website service aggregates customer reviews and ratings for various services, including credit card providers.

Data Collection and Aggregation

  • Score Collection: Mintify gathers customer service scores for each credit card provider from the platforms Which? and Trustpilot.
  • Score Harmonization: To ensure consistency, scores from both sources are harmonized, accounting for different scales or formats.

Implementing the Quintile System

  • Conversion to 5-Star Scale: The harmonized scores are then converted into a 5-star rating system. This is achieved by dividing the range of scores into five equal parts, or quintiles. Each quintile corresponds to a star rating: the lowest quintile is 1 star, and the highest quintile is 5 stars.
  • Calculation of Quintile Ratings: For each credit card provider, the aggregated score is placed within these quintiles to determine its 5-star rating. This quintile placement reflects where the provider’s score falls relative to the overall distribution of scores.

Fees & Charges (10% of total score)

To calculate a 5 star rating for Fees & Charges, we use the following process:

Categorize Fees and Charges: Separate the fees and charges into two categories:

  1. Fixed monetary fees (like annual fees, late payment fees).
  2. Percentage-based fees (like balance transfer fees, cash withdrawal fees).

Normalise Each Category Individually:

The total fee scores are scaled to a range between 0 and 1 using Min-Max Normalisation. This technique transforms the data so that the minimum value in the dataset becomes 0, the maximum becomes 1, and all other values are scaled proportionally between these two points.

  • For fixed monetary fees, normalise based on their absolute values.
  • For percentage-based fees, we normalise them separately.

Combine Scores: After normalising, we combine the scores from both categories. This is done by calculating a weighted average where certain fees are more critical than others. For example, overseas transaction charges are weighted higher for cards marketed towards travel rewards or Avios.

Assign Star Ratings: We divide the normalised scores into five equal parts, each corresponding to a star rating from 1 to 5. Cards in the lowest 20% of fees will receive 5 stars, and those in the highest 20% will receive 1 star.

Fees and their effect on our rating

Credit cards that charge a fee are going to be somewhat negatively affected by our scoring system because fees (additional cost) make it harder to score highly in the context of rewards card given that we are;

  1. using average consumer spending data in our calculations where the net effect on ‘spend to value’ is likely to be diminished
  2. weighting rewards ‘spend to value’ highly (60%) in the overall calculation.

This effect can also be seen in the ‘Representative APR’, which often makes the cost of borrowing look very high when factoring in annual fees. However, it is possible for a card to rank highly, even after the annual fee is factored in, and some do. Equally, our expert reviews will clearly point out where a card’s rewards scheme has been specifically tailored to benefit higher than average spending.

Balance Transfer & Low Interest

With responsible use, credit cards can be a cost-effective option for short-term borrowing, potentially reducing or completely bypassing interest costs. With that in mind, the most important consideration when choosing a balance transfer or low-interest card is how much it can help you save on interest. Specifically, does the product’s introductory APR offer give you the time you need to pay off debt or finance new purchases while avoiding interest?

As such, we consider the potential value of a card’s introductory offers as primary in weighting their overall score, with an introductory balance transfer APR having a larger influence on a card score in the balance transfer category and an introductory purchase APR having a larger influence in the low-interest category. We also rate each card’s Representative APR since you may need to carry a balance long term or after your introductory APR period ends.

While the APR characteristics are the predominant factor in shaping the score of a balance transfer or low-interest card, ancillary factors like the card’s benefits and the issuer’s customer service reputation are also integrated into the overall assessment.

Here’s more detail on how our scoring breaks down for balance transfer and low-interest cards:

Introductory Offer (60% of total score)

Interest Rates (20% of total score)

Customer Service (10% of total score)

Fees & Charges (10% of total score)