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What You Need To Know About Credit Cards
What is a credit card? A credit card is a card that allows you to borrow money to pay for things. There will be a limit to how much you can spend called your credit limit. At the end of each month you can either pay off the whole of the amount you owe or make a minimum repayment. Other kinds of cards include:
Do you need a credit card? Using a credit card is a useful way of making purchases:
How do you choose a credit card? The main two UK credit card issuers are Visa and Mastercard. These are accepted in most places and in 130 countries worldwide. Beware of less well known brands that may not be accepted everywhere. Before you choose which credit card is the best for you, remember to read the terms and conditions carefully. Never sign up for a credit card without fully understanding what you are agreeing to. Remember that all the plus factors will be prominently displayed in large print. You may have to study the small print carefully to discover if there are any negative factors. What You Need To Consider: 1) APR (Annual Percentage Rate) 2) Special Introductory Rates 3) Balance Transfer Rate 4) Interest Free period 5) Cashback and Rewards 6) Minimum Repayment 7) Annual Fees 8) Late Payments 9) Exceeding Your Limit
Whether or not your application is successful will depend on your credit rating. Your credit rating depends on your credit history (a record of your use of credit) and is based on the record of your ability to repay debt. You can obtain a copy of your credit file by contacting a credit reference agency. There may be a small fee for this service. When you application has been accepted you will be given a credit limit. The credit limit will be fixed when you first apply for your card (although you can ask for it to be increased or decreased later) and the limit, including the amount you have left available to spend, will be shown on your monthly statement. Insurances and Protection.
1) Take good care of your credit card to ensure that it isn't lost or stolen. 2) To prevent misuse of your card you must report any loss or theft of your card to the issuer immediately. Many issuers allow you to register all your cards with them so that in the event of you losing a purse, handbag or wallet they can all be cancelled with just one phone call. 3) You must keep all your receipts and also check your statement carefully and report any suspicious transactions. For example payments that you have no record of making. 4) Credit card companies are now issuing cards with PIN (Personal identification numbers) which are known as Chip and PIN cards. Rather than signing your name you will be asked to enter your PIN onto a keypad. You must ensure that you keep this number secret. What The Issuer Will Do 1) The issuer should insure you against loss, misuse or theft of your card. 2) The issuer may also insure your purchases for up to 100 days. 3) Your issuer may also provide protection against you being sold unsuitable or shoddy goods. Important Points To Remember: a) Credit cards can be a very useful tool to help you to manage your finances. For a glossary of the terms mentioned in this article please visit the credit card glossary page. Phil Edwards is a Business analyst in the city of London, freelance writer for several finance magazines and websites and co-owner of 1st UK credit cards and 1st UK bank accounts
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