UK Financial Online

  Tell Me More About..............

UK Credit Cards

Cash Back And Reward Credit Cards - The cash back credit card is a relatively new arrival in the world of credit cards. The basic rule is that the rewards are minor and the purchase interest rate higher. To get cash back of 0.5 - 2% on every purchase, generally you will have to pay an extra 3 or 4% in purchase interest. The way to beat this is to pay off your balance every month, if you do not, the extra interest charged on your balance will generally work out to be more than the cash back earned. So if you are the type of person that uses are credit card a lot and you pay off the balance each month, then this probably is a good credit card for you. Most pay you your cash back in a lump sum at the end of the year. For the majority of us mere mortals, this is a small amount totalling less than £20 per annum, but if you are a really high spender, then it can literally amount to hundreds! (There is a ceiling on how much cash back you can earn with most credit card companies).

Low Interest Credit Cards - The credit card industry has now changed so much, that it is not necessary to pay an interest rate of 20% or more. Now, there are some really good deals starting at 0% for 6 months. If you do not have a credit card debt at present, but are planning to take one on in the future (eg plans to buy a stereo), then one of these low interest rate cards will be very useful - especially if you can pay off the debt in the first six months before the interest rate goes up. Even if you haven't cleared the balance by the time your introductory rate has expired, many credit card issuers do not raise the interest rate up to a high rate.
                 There are so many 0% Credit Cards available now that you could possibly keep going by taking out a new Credit Card every 6 months! But possibly,  it would be easier to run up your Credit Card debt on a 0% card for 6 months, then transfer the balance to another Credit Card with a Permanent Balance Transfer Rate and live with the debt at a low rate of say 5.9 % until the debt is paid off. Balance Transfers - If you already have existing credit card debts, a balance transfer is a good idea if the new credit card issuer offers a lower interest rate.

Balance Transfers - There are also a few card issuers offering a Lifetime Balance Transfer Rate until the transferred debt is paid off. If  your debt is high and you don't stand a chance of paying it off within 6 months, then this is the card for you. Some Credit Cards are offering Permanent balance transfer rates as low as 4.9%, the highest you will encounter is around 8%. This is a much cheaper option than taking out a personal loan from your bank to consolidate your debts.

Bad Credit - If you haven't been a good debtor in the past, that may not be a problem. There are numerous companies out there who will still consider  applicants with a blemished credit record. Because you are a bigger risk, you will be charged a higher interest rate. But if it is a credit card, you can pay the balance off in full at the end  of the month and not pay any interest at all.
                   Some credit cards offer you the chance to rebuild your credit rating. This actually applies to all credit cards in reality. If you are a good  customer, your transaction history will be on file, thus building a new credit profile which will go some way  to counteracting previous  misdemeanours. It will take a good while, but if you build up a good profile over a period of  time, eventually, your past errors may be all but  forgotten.
                    All credit providers assess you in different ways. Therefore, if one provider rejects you, another one may not. A word of caution though. Too  many applications for credit in a short space of time may itself stand against you. So....think hard  about who you will apply for credit with, if  they reject you, one or two more applications may be OK, but don't overdo it. If  you are rejected by three credit providers - then call it a day for  at least six months!!
                     Trying to find out why you have been rejected can be tricky. You can ask for a copy of your credit file from credit checking companies who will also  give you a credit report. Sometimes, though these can just confuse you. However, they can tell  you if you are being muddled with a  member  of your family (or a person previously at your address who has the same surname - yes it does happen!). Sometimes, it is impossible to tell, a credit company may simply turn you down because your income is not high enough, yet they may not have mentioned a minimum salary requirement in their information. (You generally can borrow up to 1/2 your salary for a personal loan). So sometimes, you may be  rejected for a really simple reason, rather than that you are considered un-creditworthy.
                      If you are really having problems, do some ground work and investigate your position before applying. There is a lot of help out there on the internet. DO NOT pay  someone to investigate  your credit problems on your behalf unless you know them to be reputable. They could end up  doing more harm than good!! Eventually, nearly all of us can undo our past credit blunders - so be patient and most importantly....BE GOOD!!