| A credit card is a small plastic card issued to users of the credit card system. When a credit card is used during a transaction the money from the users's account is removed to pay for the purchase.
Balance transfers
Some credit card companies offer the ability to transfer your balance. A credit card balance transfer simply means moving your debt or balance from one credit card provider to another. It's often a good way to save money, as many credit card companies offer an interest-free period on balance transfers to new customers,
so it is good to take advantage of this and move your balance to an interest free card for the interest free period. See the note about handling fees as these are often applied.
New Purchases
As an incentive to open up a credit card account some companies have offers on any new purchases you make on the card for a period of time. Some for instance will offer a 0% rate for new purchases for 6 months.
It is becoming increasingly common for providers to charge a handling fee when offering 0% on new purchases.
Reward Schemes
Reward and loyalty schemes are methods used by credit card companies to try and incentivise the opening of a credit card account or the continued use of it.
Some rewards can be of real value to the user and these can include cashback or points on your purchases. If you are interested in getting a reward card make sure that you will use it enough to get your reward, and that you
are interested in what rewards they are offering.
Standard APR
APR stands for the Annual Percentage Rate. You can use the APR to compare the different credit and loan offers and rates from each finance company. The APR takes into account not just the interest on the debt but also other charges you have to pay such as an arrangement fee.
All credit card lenders are obliged to tell you what their APR is before you sign an agreement by law. These will vary from lender to lender. Generally, the lower the APR the cheaper the borrowing, so if you are thinking about opening a credit card account shop around to compare the APRs. Sometimes loans from banks have a lower APR than some store cards.
Handling Fee
Handling fees have become more popular with credit card and finance companies. This is generally to cut down on the amount of people changing from one interest free card to another.
Be sure to check the amount of the handling fee before you apply, as it could make a significant difference to your payments.
Please note
Send me Discounts does not recommend any financial products to our users, we simply list information relating to the latest deals and offers which they make available to customers. We advise that you always do your research and fully read the terms and conditions before arranging
any credit arrangement or taking out a financial product. You may wish to do more research before you take out a credit card, we recommend these sites BBC Finance, This is Money
|
