Credit Cards Defined
What is a credit card?
A credit card is a card which gives you access to credit. It means that you can pay it off in full every month or you can pay it off in part every month. If you pay off your credit card debt in part, you will be charged interest. You might also be charged an annual fee, too.
How do I get a credit card?
You get a credit card by approaching one of the many companies that are out there in the UK. We've got a very competitive credit card marketplace in the UK. You can get a hold of an application form and apply for a card.
How many credit cards can I have at any one time?
There are no limits to the number of cards that you can potentially have. However, no lender is going to want to give you access to credit if they don't feel you can actually repay any money that you borrow. If you apply for a large number of cards, you may find that you start to get turned down. In fact, over a third of applications for credit are turned down.
How often do I have to pay off a credit card?
Usually, you'll get a monthly statement and monthly bill to pay off a credit card. By and large, that's the way credit card companies operate.
What happens if I go over my credit limit?
If you go over your credit card limit, you'll find that your card will be refused when you try pay for something. In all likelihood, you will not be able to use your credit card until you've brought it back down beneath the credit limit.
Can I increase my credit limit?
You can speak to a credit card company and they will decide whether they're prepared to increase your credit limit.
What is a credit reference agency?
There are three main credit reference agencies in the UK and they hold lots of information on us as individuals. That's the information that the lender will look at to make a decision about whether they're prepared to lend you money. That's not just a credit card company, that's any company that is going to be lending you money.
What does APR mean?
APR stands for Annual Percentage Rate. It's a comparison tool. It enables you to look at the cost of actually using your card. It will cover things like the interest rate and any charges associated with the card, and will enable you, at a glance, to make comparisons between different cards.
What should I do if there are unauthorized charges on my card?
If you've got any problems with any of the transactions on your statement then you should speak to your credit card company. If they are fraudulent, you're protected as a customer in the U.K. You won't be liable for any financial losses and, provided you haven't been negligent with your credit card, you will get your money back.
Can I use a credit card at a cash machine?
You certainly can use your credit card at a cash machine, and that isn't just cash machines in the UK, but cash machines abroad as well. However, if you use a cash machine, either at home or abroad, you will be charged a fee. That information will be stored on your statement so you can see any charges associated with withdrawing cash on your credit card.
Why has my credit card issuer held up a transaction I was making abroad?
Your credit card issuer can hold up transfers you make abroad because there are fraud intelligence systems working in the background to spot any irregular spending on your account. it can happen quite simply because you've handed over your card to a retailer - a foreign retailer - who's been asked to do an additional security check, which happens on all transactions around the world. Because they haven't wanted to phone your card company or tell you that the card is declined - which isn't the case. This is why our advice is if you're going abroad with your credit card, make sure that you've got the number of your card company so that you can contact them. Also, do not rely just on one card. Travel with two just in case there are any difficulties but, by and large, no card company is going to want to see you, the genuine customer with a genuine card, turned away so we don't hear of this happening regularly.
If I buy goods with my credit card and they are defective, is the card issuer liable?
You do get additional protection on defective goods with your credit card which comes under Section 75 of the Consumer Credit Act. This means that if you purchase something over £100 and under £13,000, you have additional protection should anything go wrong with that transaction, or the retailer concerned. This additional protection is another big benefit of using your credit card.
How much should transaction fees be?
You're not likely to be charged a transaction fee for just making purchases in the UK. You may well be charged for using your credit card in certain capacities, such as withdrawing cash from a cash machine, withdrawing cash from a cash machine abroad or using your card to obtain cash in a foreign exchange bureau. Those kinds of transactions will attract additional fees. All of that information will be on your summary box.
Who is liable if I am a victim of card fraud?
As a credit cardholder, you're not liable for any fraud on your account providing you haven't been negligent. The liability will rest with the credit card company or the business concerned, depending on what kind of a transaction it was.
Who is liable if I am a victim of card theft?
Credit card theft is covered the same way as card fraud. Providing you haven't been negligent, for instance, writing down your PIN and keeping it with your card, then you can expect to get all of your money back should a thief obtain your credit card.
Why am I charged to withdraw cash on a credit card?
You are charged for withdrawing cash on a credit card because they weren't designed for cash transactions, they're designed for purchases. If you want to obtain cash using your credit card, you will find that it attracts a fee.
How many different credit card products are there in the UK?
We reckon there are about sixty credit card providers in the UK; over sixty providers, and a thousand different products. Credit cards are a very competitive market place.
