Top tips for choosing credit cards
Balance transfers – avoid paying interest by switching credit card providers before the introductory low or 0% interest rate runs out.
Interest rates – be careful as some offers only relate to balance transfers and not new purchases. Ideally you want a good introductory rate and a competitive ongoing rate. When comparing interest rates always use the APR (Annual Percentage Rate) because this allows you to make like-for-like comparisons. By law, companies have to publish their APR.
Annual Fees – never choose a credit card that charges an annual fee – most of the newer, more competitive cards don't charge them.
Cash withdrawals – most credit card companies charge around 2% a month for drawing out cash using a credit card, representing poor value for money.
Using your credit card abroad – credit cards are very handy to use abroad however there will be charges and catches similar to those that apply when withdrawing cash, so be sure to check out the small print, and your alternatives, in advance.
Loyalty schemes – these kinds of credit cards are only really worth it if you use your credit card on a regular basis, otherwise the benefits of extra points or cash back will be marginal.
Insurance – this can be a useful benefit and many major credit card companies offer free insurance on any goods over a certain amount bought using their card. You can also get free travel insurance with some credit cards.
Did you know?
- On June 29th 2004 the Bank of England announced that UK debt stands at £993bn, just short of the £1 trillion milestone, now expected next month.
- There are more than 90 million credit, debit and store cards in the UK.
- Approximately half of the UK population owns a credit card having, on average, two cards each.
- 50% of those who have a credit card pay the balance off in full every month.
- The average balance of a UK cardholder is £1,140.
- Approximately 13,000 credit cards are stolen in the UK and Ireland on a daily basis.
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Hot Topics
- How can I keep my credit card secure?
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Like anything, a credit card can be stolen or used without your knowledge, so follow these simple rules to keep your credit card secure:
- Why would my credit card application be turned down?
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There are many reasons why your credit card application could be turned down, and these reasons vary between all credit card issuers.
- What is a credit report?
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When you apply for credit, your credit history will be checked out before approving your application – and your credit card issuer will refer to one of the independent credit reference agencies.
- Where can I pay my balance?
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You can pay your balance in a variety of ways, choose whichever best suits you:
- How much will I have to pay each month?
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How much you have to pay back each month depends entirely on how much you owe – however the general rule for most credit card companies is that you either make a minimum payment of 2% of the balance or £5, whichever is the higher figure.
- How do I use Credit card cheques?
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When you receive your credit card, you will also receive some credit card cheques in the post.
- Why is it worth making a Balance Transfer?
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If you have a large outstanding balance on one or more credit and store cards – you will undoubtedly be able to save money by transferring your balance to another credit card.
Bad Credit history?
Don’t let a bad credit history stop you from getting a credit card. If you have any of these problems you will still be able to get a credit card:
- Mortgage Defaults or Arrears
- Adverse Credit and Finance
- Poor Credit History
- CCJ's
- No Proof Of Income
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