A Guide to UK Credit Cards

There is a massive amount of credit cards available in the UK banking industry , some very good credit card deals to be had .

Deals like : 22 months 0% balance transfers and 0% purchases , at one end of the scale . At the other end of the scale there are deals like : 39.9% on balance transfers and purchases , although there are even worse ones than this example.

How to use a Credit Card

If you use it right , a credit card can be a very cheap and easy way to borrow money on a short term basis . Meeting all payment deadlines and preferably making a payment to pay the balance off in full before the end of the 0% period ends is essential to manage your credit cards effectively . Plan the amount you are going to borrow and decide exactly how and when you are going to pay it back , this applies to every type of card borrowing . Make sure you will not be stuck paying the minimum balance for what seems , the rest of your life .

Types of Spending

You can vary the ways to use your credit card and the best way to manage your card correctly is to investigate the deals which are offered by your provider . Some offer 0% balance transfers which can be used to settle existing credit accounts like a bank loan or another credit card . Some offer long term deals on card purchases , which means anything you buy using your new card will be charged at 0% for a agreed period and some offer reward schemes , meaning the more you spend the more rewards you get .

0% Balance Transfers : Deals on credit cards that offer balance transfers should usually be used for just that as in most cases the credit card company will try to make a profit from you when you use the card in a different way such as , Purchases or withdrawing cash .

On Purchases : Purchases on your card during a set period are charged at a low or 0% rate if purchased within a given time scale and are charged at the agreed interest rate by the card provider for the stated amount of time .

Rewards : These are also offered as a incentive to customers to make a credit cards deals seem more attractive , a typical reward would be a cash back incentive or air miles . Air miles are now considered a very poor deal by some people since the take over and re-branding of the company which now charges booking fees and airport taxes on the air travel deals that you wish to book

How NOT to use your Credit Card

Get your credit card deals and rewards wrong and you will be stuck with the debt for years so be very careful with the deals you enter in to

A Short List

Don't ever borrow more on your credit card than you need .

Don't ever miss a payment .

Don't ever let your 0% deals finish with out having paid off the balance in full even if this means switching the balance to another 0% deal with another provider .

Don't ever use your card to replace money that you have not earned or are not going to earn ( living above your means ) .

There is also some excellent information on credit cards to be found here on Martin Lewis' website MoneySavingExpert.com