CREDIT CARD GUIDE
Credit cards are
a form of borrowing used to purchase goods and services, to obtain cash advances
and for consolidating debt. For the majority of credit cards interest is charged
if the balance is not paid in full by the payment-due date. You can
benefit from up to 59 days interest-free credit depending upon when your purchase
is made. Some card providers charge an annual fee which can be waived in certain
A specified credit
limit for each cardholder will be agreed at the outset: it depends upon individual
circumstances and this is reviewed regularly.
Most credit card
issuers insist on the cardholder paying a minimum amount each month or paying
a percentage of any outstanding balance each month. There may be a penalty for
late or returned payments or for exceeding any personal credit limit.
Credit cards may
offer introductory rates that are lower than the standard interest rate for a
specified term. This introductory rate is usually for purchases and balance transfers
but it may also apply to cash advances. It is advisable to check the terms for
The interest rate
charged on cash advances is usually not the same as for purchases. There is usually
a fee for using your credit card to obtain cash and an additional charge for using
your card abroad.
rates are applied to existing card debt that is being moved from one issuer to
another or a consolidation of other debts. These rates tend to be lower than standard
rates and apply to the debt transferred or consolidated for a specified term or
until it is repaid in full.
who pay off their interest in full each month there are other benefits offered.
Loyalty points are a way of gaining a benefit from using your card and can be
used in varying ways. Other cards offer benefits such as free travel accident
insurance, discounts on holidays, or free purchase protection insurance (particularly
useful if buying over the Internet or by telephone).
/ Platinum Credit Cards
A higher level of income is usually needed to qualify for these cards and they
offer additional benefits such as free travel insurance, free card protection,
savings on travel and / or hotels and free extended warranty for additional year(s)
on many household appliances.
Charge cards have no pre-set spending limit and require the user to repay any
balance in full each month. Most issuers charge an annual fee for membership.
Charge cards are often termed Travel & Entertainment cards (T&E) and they
offer benefits for the traveller.
These are issued by credit card companies and operate as standard credit cards
but a percentage of purchases made via card usage is donated to a charitable beneficiary
by the issuer. A donation is also made to the beneficiary on issue or first use
of the card.
Store cards are a form of credit card but are issued by or for a particular retailer
and can only be used in that retailer's store(s) / chain (unless it is endorsed
by a credit card company).
Some still charge up to 30% a year. Avoid at all costs, unless you are certain
that you will pay them off in full each month.
How to choose a credit card guide...
How to use a credit card guide...