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Guide to Credit Cards
UK Credit Cards

Download the Credit Cards PDF Guide here - see our other free PDF guides here

Guide Contents

Thinking about credit cards?
How to manage credit card transfers and debt
Types of credit cards
Understanding credit card charges
Shopping around for the best credit card deals
What to expect when you apply for a credit card
Credit card FAQ - eg. What Are 0% and Interest Free Credit Cards
Where can I go to get more credit card help?

Are you currently thinking about applying for a new Credit Card?

Thinking about a new credit card?

Are you looking for ways you can borrow money without having to use your home as security, and without having to take out a personal loan? One option, if you are 18 years of age and a UK resident, is to consider is a credit card.

Credit cards are a type of unsecured flexible loan which enables you to:

  • access funds as and when you need them, up to an agreed limit.
  • borrow up to the credit card limit and pay off differing amounts monthly, in line with the minimum repayment requirements.
  • have a globally accepted card.

Unlike other types of loans most major credit cards also give you access to things like:

  • rewards points schemes
  • free travel insurance
  • purchase and theft insurance cover
  • air miles
  • cash back deals
  • prize draws/free gifts/competitions
  • preferential purchase options for music, sports and entertainment events

The kaleidoscope of these extras can make credit cards appear quite confusing. Remember a credit card is just another type of flexible loan, the extras are used by credit card companies to try to distinguish their cards from everyone else's.

Along with standard credit cards most major issuers also offer Gold, Platinum, Premier or Prestige versions of their cards, usually to high value or long standing customers. These cards are the same as standard cards but with additional benefits and flexibility. Most major credit cards use either Visa or Mastercard which are international payment organisations, enabling them to be accepted all over the world. Managed appropriately with financial discipline credit cards can be a great way to access short term loans as and when you need them. Paying off all or most of your credit card balances each month can result in the loan actually costing you little or no interest.

Credit cards offer a level of protection that debit cards can't, i.e. if someone charges fraudulent transactions to your credit card (and you can prove they weren't made by you) you will not have to pay them back. All credit card issuers are also jointly liable under the terms of the Consumer Credit Act, for:

  • purchases over £100
  • faulty goods or services
  • if a retailer goes out of business.

This protection combined with the additional benefits of loyalty schemes and rewards means credit cards can offer a high level of financial flexibility.

However, on the flip side, credit cards can pose a higher risk to borrowers than other types of loans. When not managed appropriately, i.e. repayments are not made on time or are too low to cover the interest and charges, the debt becomes very large very quickly. It can continue to increase, as the larger the debt the higher the charges become, making it very difficult to repay. Also, regularly missing repayments on your credit card can damage your credit rating for future loans; so it's important to understand what you are taking on if you decide a credit card is for you.

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