Credit Cards


Having a credit card provides an easy and instant means of getting an unsecured loan.  If used sensibly, credit cards are valuable tools to help manage your day to day finances.

There are many different credit cards available - through banks, stores, dedicated credit card companies and other organisations.  Some charities and organisations not in the finance business may offer cards (backed by dedicated credit card companies) from which they receive some benefit.

How a credit card works.  When a purchase is charged to your card, the seller receives payment from the credit card company less a percentage of the price - this percentage should not be passed on to customers.  The price is added to the balance you owe to the credit card company.  Periodically (usually monthly) you receive a statement from the credit card company showing your current balance. 

There may be an annual fee charged for possessing a credit card.  Some companies may waive the fee for good customers.

Payment will be required some time after the date of the statement.  There will usually be a minimum amount to pay, or you can pay off the whole balance, or any amount in between.  If you do not pay the minimum amount in time, or if you exceed your credit limit, you will be charged penalties and may be prevented from using the card. For most cards, if the whole balance is paid off by the due date, there will be no interest charged.  If any amount of the balance is left unpaid by the due date, you will usually pay interest on the whole of the statement amount.  Even the best credit card interest rates are high compared to long term loans.

Online ads and links as included on this page are useful to compare credit card rates and terms - check a few - before applying online.

Sensible use of a credit card would include using the card to cover an emergency or to take advantage of a bargain price on a planned purchase, and paying off the full balance of the statement following your next pay day.

 If not used carefully, credit cards provide a dangerously easy means of building up debts at relatively high interest rates.  Do not think of a credit card as a means of increasing your income: it may appear to do this in the short term, but if you continue to use it to spend more than you earn, your debts will snowball and the cost of servicing your debts will reduce rather than increase your spending power.  If your do find yourself in difficulties, debt consolidation or credit card balance transfers may provide a lifeline - but only if accompanied by lifestyle changes.

Able was I ere I saw Elba

Financial Information Services; Banks; Debit Cards; Prepaid Credit Cards
Loans; Secured Loans; Payday Loans; Balance Transfers

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