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A credit card is a like having a loan on a plastic card and allows you to pay for a whole range of goods and services. When applying from one of our credit card providers, the company will assess your credit rating and assign you an interest rate and credit limit accordingly. The idea is that the better your credit rating, the better rates you will get and the higher your credit limit. Your credit limit is the maximum you can spend on your credit card each month without going into your overdraft where the charges increase significantly. Similar to a loan, the company will send you a statement each month either in the post or online and arrange a day for repayment to collect what you have put on credit.
Credit card companies in the UK make their money from customers who miss their monthly repayment. So if you pay back on time each month, you won’t pay any interest on your credit card. However, by missing repayment or failing to make the minimum repayment required, you will be charged an average interest rate of 18% so it is important to pay your debt before the interest is applicable. There is also a penalty charge usually in place for late repayment and for going over your credit limit. So it is very important to monitor your monthly statements and contact the card issuer if you run into any problems. To ensure a smooth payment process, customers will typically set up a direct debit to automatically pay the credit card repayment each month.
Advantages of Credit Cards
The best thing about credit cards is that they can be used virtually everywhere and carrying a card is a lot easier than carrying cash. In certain situations it is much easier to pay for things by credit card than with cash. A lot of companies take payment over the phone or through a website and a credit card is the easiest and most secure way to do this.
By paying for goods and services on credit, you are able to pay for things in advance and repay when your next bill in due. This can come in handy if you need to pay for a large expense and you are waiting to get paid from your employer. Using a credit card to pay for things like a holiday, jewellery or tickets are a great way to put down payment on something without the money available.
Possibly the biggest advantage of a credit card is that it offers better protection than a debit card. If you buy something between £100 and £30,000, the 1974 Consumer Credit Act, Section 75, ensures you will get your money back if the transaction goes wrong. If the company you purchased from goes bust, your item is faulty or doesn’t turn up; you won’t be out of a pocket because you can make a claim and get the money back from your credit card provider. There is also the bonus of applying for a new card and earning cash back, air miles and Nectar points through various loyalty schemes.
Disadvantages of Credit Cards
If you cannot meet your monthly repayments, the added fees and interest can increase rapidly and lead to a spiral of debt. Credit card users are encouraged to pay off more than the monthly minimum and use credit cards as a short-term borrowing facility and not as a long-term solution for financial problems.
Whilst you have the option to draw cash from an ATM using your credit card, there is added charge of up to 4% for doing so. In a similar way, there are added fees for using your credit card abroad and this is something that many Britons fall victim to.
Apply for a Credit Card
Apply for a credit card online by simply comparing our different cards on offer and clicking on the provider of your choice. You will be taken directly to their website where you can fill in a credit card application and provided you meet the criteria, you can receive a credit card posted to your door within a few days. You will then receive monthly statements in the post and you can check your account whenever you wish using online banking. It is completely free to use our comparison service and we will never pass on your details to any other companies or send you messages from third party companies.
Best Credit Card Offers
At Quiddi Compare, we are committed to providing the best credit card offers in the UK. With several credit cards featured on our comparison table, you can compare the best rates and find the credit card to suit your needs. Whether you use the credit card for a special purchase, to manage your finances or pass your debt onto another card, we have all the products to suit your needs. We constantly update the comparison table with different providers and products to ensure that our customers are getting the best deals available.
Top Credit Cards
It helps to have a good credit rating in order to get a top credit card that we feature. By having a good history of paying other credit cards and loans, the card provider will likely give you access to a higher credit limit and lower interest rates. The offers we feature are presented in the form of APR, which stands for the Annual Percentage Rate and is used to compare the cost of all financial products in the UK. Since the APR stated is representative, it means that the rates offered are only available to 51% of successful applicants. In order to get as close to the offer provided, you must possess a certain level of credit and use the card for the duration in the representative example.