Mortgages

Credit Cards

credit card Across the world there are millions of transactions made daily using Credit and Debit Cards. There are many different credit cards now available offering very different APR's and some offering interest free options in the initial months.

Credit cards are the most available form of personal loan, and with nearly 70 million issued in this country, the UK stands as the most card-carrying nation per capita in the world. Their popularity is no wonder, credit cards offer convenience and easily accessible funds. As the industry has grown, many specialiSed offers on credit cards have also attracted new users.

Despite this popularity many UK residents don’t fully understand how this type of borrowing works, often to their detriment. The trillion-plus pounds of personal debt in the UK are a sign of this. Properly managed, credit cards can create a good credit rating and greater purchasing power. Some basic knowledge about credit cards is the best defence against their mismanagement.

The card represents a line of credit established with a lender, usually a bank. The lender sends a monthly statement to the cardholder indicating the balance, The sum spent and the due date for the minimum repayment, usually 2.5% of the balance. Like all loans, money borrowed through credit cards is subject to interest. The average annual percentage rate (APR) is currently around 16%, but this can vary widely among different credit options.

If the balance is paid off every month, then no interest charges will accrue. However ideal, this is not the case for the majority of users and the reason why many run into trouble with credit card debt. Unknown to most card users, any remaining portion of the balance left unpaid means interest will be charged on the entire original balance. For instance, if £999 is paid toward a balance of £1,000, the interest will still be charged for the £1000, not for the one pound left unpaid. This feature is what gets most debtors into trouble. When considering different credit options, it is important to take into account your spending habits versus the interest rate.

If you are able to pay off your balance in full each month, the interest should not be of much concern for you. If you are like most people, though, you will retain a balance of some size and should find a card with a lower interest rate.

Those looking to obtain a first credit card will likely have a larger interest rate, but conscientious use will build a good credit score and open the door for other types of borrowing. Student cards are a very popular example of such a “starter” card. Many lenders are now offering cards with very low interest rates, even 0% but this rate generally lasts only six months. Look instead at the APR after the introductory rate expires. Credit card companies are also offering other enticements to gain new accounts and maintain customer loyalty. Cash-back, reward points and airfare credits are some of the reward schemes now en vogue.

When entering into any borrowing contract, read the fine print. Credit cards often have many hidden charges, and you may end up paying out more than you expected. Late fees, usually around £25 are a given, but they can negatively effect your credit score and raise your interest rate.

So as you can see there are pros and cons to any credit card and below we try to explain these as well as showing you the different cards aimed at specific sectors, e.g Student Credit Cards, those for Business and the new DIY card which you can dictate to an extent as to how it functions.

Please click below for more information;

 

Credit Card Guide

Compare Credit Card rates Chip and Pin Security
Credit Card Protection Hidden Charges
Credit Card Debt Balance Transfers
Late Payments Credit Card Fraud
Student Gold
Platinum Business
D.I.Y Reward Schemes
0% Balance Transfers Cashback
Standard / Classic Cards  
Card Repayment Calculator
 

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