There are many advantages to using a credit card for daily purchases, such as groceries, gas for the car and small purchases. They eliminate the need for carrying money with you all the time or the need for running up charges on your bank account by constantly using your debit card. Most hotels, for example, will not take a reservation without a credit card number that they can place of file even if you do not plan to use the credit card to pay for the accommodations. When you books flight online or make any purchase online, you cannot do so without a valid credit card. In this way, credit cards do give you security in knowing that you can make a purchase when you need to.
The important thing to know about taking advantage of the credit card is how to manage it properly. In order to avoid paying interest charges on the unpaid balance, pay off the balance at the end of the month or before the due date on the statement. You wont incur extra charges, not will you be late with your payment. This reflects well on your credit record when you do need to borrow from a lender.
If there are times when you are unable to pay the unpaid balance of the credit card in full, make, it is a wise practice to pay more than the minimum payment. This payment includes the interest charged on your unpaid balance and only a small portion of it will go towards paying off the balance. Anything that you pay over and above the interest for the month will help top reduce the amount you owe because it is applied directly to the balance. By paying only the minimum payment, it will take you a long time to pay of the credit card.
Compare the interest rates charged by different credit card companies to make sure you are paying the lowest rate possible. There are many companies that offer promotions in which you can pay off your outstanding balances on other cards for 0% interest or a low interest rate for an introductory period, which is usually six months. Even if you know that you will not be able to pay off the balance in full in this period, you can benefit from switching to this new card because by making your payments for six months you will drastically reduce the balance on which interest is charged after that time. You can also take out a loan to consolidate all the balances on your cards if you have more than one. This way you only have one monthly payment that is lower than the combined payments of all the cards.
Before you pass over your credit card to make a purchase, ask yourself if it is something that you need or if it something you just want to have. When you take all of your purchases seriously, you will be able to resist the temptation to make a frivolous purchase that you will later regret. Even though you do not have to pay the money for the purchase right way, you will have to start making payments when you credit card statement arrives.
Many credit cards come with other benefits such as accumulating points you can use toward other purchases. This is the case with many of the credit cards offered by large companies. When you make a purchase a percentage of the amount goes into a points balance. Then when you shop at that store again, you can have these points credited toward the cost of your purchase, thus reducing the price you would have to pay. If you are making a large purchase and you do have the cash available to pay for it, it would be to your advantage to use your credit card just to obtain the points. Then after a few days when the purchase has been added to your account, you can pay off the balance. This way you do not pay any interest charges and you get the points, so it is better than paying with cash. For large purchases as well, most businesses prefer to take a credit card rather than a personal check, so you may not have the option of paying by check.
If you travel a lot, you can also benefit from a credit card that gives you air miles for the money you spend. When you accumulate enough air miles for a trip, then you basically have the trip free because you have it already paid for. Just keep in mind that in order to use the air miles you do have to book well in advance to fly at the lowest number of miles. Most of these cards do come with an annual fee, but it pays to shop around to find a card with the lowest annual fee or no fee at all.

If you are worried about getting a credit card or have a credit card and it is not working out for you, then maybe you should look at some of the alternatives on offer. There are a growing number of card alternatives to credit cards, some of which may be a better option for you.

Why look at alternatives?

There are plenty of reasons why looking at credit card alternatives are a good idea. Although credit cards have their uses, they also have many dangers and problems. Credit cards tempt you to spend more than you can afford, and then the high interest rates mean your debt increases quickly.

Credit cards can also be difficult to get if you have poor credit or you are young and have never borrowed before. Therefore, it pays to look at the alternative card options.

Charge cards

Charge cards are the most popular alternative to credit cards. Although many people believe that cards like Diner’s Club and American Express are credit cards, they are in fact charge cards. Charge cards are similar to credit cards apart from the fact you have to pay the balance off in full before a set time period expires. This is useful for people who know they can pay balances off each month or couple of months.

Credit limits on charge cards can be high, which is good if you need to make an expensive purchase. The problems with charge cards are that they are not as widely accepted as credit cards, and if you do not pay the balance off the interest rates and charges are extremely high

Debit cards

Another alternative to credit cards are debit cards. Debit cards can be used in much the same way as a credit card, but instead of having credit and paying money off each month, debit cards take money directly from your bank account. You can only spend the amount that you have in your account.

The value of debit cards is that you do not overspend, because you are only spending what you can afford. There are also no interest rates because you are not borrowing money. Debit cards are also as widely accepted as credit cards. The problem with a debit card is exactly its strength; you cannot spend more than you have. This is a problem if you need to buy high value items. Also, the security and buyer protection for debit cards is much lower than for credit cards.

Prepaid cards

One of the newest alternatives to credit cards are prepaid cards. Prepaid cards work like a credit card, with all the security features and spending capabilities. However, they also have the features of a debit card in that you do not borrow money, and only spend what you can afford. You prepay money on to the card, which you can top up much like you do for mobile phone credit. You can then use the money on the card for credit purchases.

These types of cards are especially useful for teenagers and young adults, who need some form of card but who also have to control their spending. Parents can monitor and control a child’s spending by only putting a certain amount each month onto the card.

Although prepaid cards cannot offer the credit you need to buy expensive items, they do offer protection and security as well as stopping you from getting into debt. If you are having problems with your credit card spending, then getting a debit or prepaid card could be a good option for you.

Many people have questions when they apply for a credit card – which is the best for me? How do they decide to give me a credit card? Why do they need to know all these things about me? What does it mean to be pre-approved? What could make the card company decide not to give me a credit card?

It’s not all that mysterious a process. Companies make their decisions based on your credit score, which is derived from your credit report and other information that they may have about you. Your credit record is maintained by reporting bureaus – the Big Three are Equifax, Experian and CallCredit. Each maintains a separate credit history, and as a general rule, they don’t share information with each other. Your credit file may contain may details like:

-People on the electoral register at your address
-Details of late payments or defaults on any loans
-CCJs and bankruptcy orders against you
-All your applications for credit
-Other people who share your address

The credit reference agency does no more than supply the information on your credit history. When you apply for a credit card, the company that will issue that card takes your credit report and feeds the information in it into a set of algorithms – mathematical equations – that compare your information with the information about a fictitious ‘ideal customer’. That customer has certain traits – a particular wage, a certain number of credit cards, a particular marital status, own a home or rent one, be living there for a certain number of years. The closer your own traits are to that ideal, the higher your credit rating or score will be. The higher your credit rating, the more credit card companies would be pleased to have you as a customer.

Before you apply, it’s to your benefit to shop around for the best credit card for you. It is NOT to your benefit to just apply willy-nilly to any credit card offer that strikes your fancy. It’s really not true that ‘the worst that can happen is they’ll say no.’ There’s another, not-so-obvious consequence to credit card rejections. You might have noticed that one of the things that appears in your credit report is a list of your applications for credit. If that list is too long, it will be a negative mark in your credit score, making it harder for you to get the credit card you want. That’s why it’s important to shop around before applying – and the best is one that is almost certain to approve your application.

Some reasons your application may be turned down:

-You’ve applied for a card that targets people with higher credit scores.
Most companies that issue credit cards have a variety of them – they call them ‘credit products’ – each aimed at a different market. A reward credit card, for instance, often targets those with the best credit scores. At a credit card comparison site you can check each credit card offer to see if it is aimed at those with excellent, good, fair, poor or bad credit, and apply for the one that best applies to you.
-You don’t have any credit history.
Believe it or not, never having borrowed money before can work against you when you apply for a credit card. If you have no history of having paid bills, then the company has no way of judging whether or not you’ll pay their account.

-You’ve not been in your current job or residence long enough.
One of the pieces of your credit score puzzle is how stable you are, and that’s judged by how long you’ve been in your current residence or position. If it’s less than two years, it will be a negative, even if there’s a good reason for it.

-You’ve applied for too many other credit cards and loans.
This is one reason to be sure you only apply for the best credit card – the one that you’re most likely to be approved for. If you’ve applied for many credit cards in a six to twelve month period, the credit card companies may see it as a sign that you may be in financial trouble.

Debt consolidation is a term you’ll hear often in the adverts for loans – especially home loans. The idea is to take out a loan large enough to pay off your credit cards and other loans, then pay off the loan at a lower interest rate than you were paying on the credit cards. It’s a logical leap – except for one thing. It works even better if you use the lowest interest rate loan available – 0% balance transfer credit cards.

0% balance transfer cards were the product of a competitive marketplace – the credit card marketplace. After years of growth in the credit card market, the providers found themselves in the position of having to entice customers from each other in order to keep on growing their market share. In order to do that, they came up with several schemes to make their credit cards more attractive than those of their competitors. Balance transfer credit cards are specifically designed to get you to shift your existing balance from one credit card company to another by offering you a better deal. And while 0% balance transfer credit cards are a bit more scarce than they were two years ago, they do still exist – and they’ve been joined by other low interest balance transfer credit cards schemes.

The Benefits of Credit Card Consolidation with Balance Transfer Credit Cards
There are a number of benefits to taking advantage of a balance transfer scheme to get control of your credit card debt.

1.Low (or no) interest slows down the mounting of your debt. If you’ve been carrying half a dozen balances on higher interest credit cards, chances are your minimum monthly payment doesn’t even nibble at your outstanding balance. That’s because credit card interest rates are designed to KEEP you in debt, not get you out of it. By moving all of your high interest balances onto one low interest card, you can attack it more directly and keep it from spiraling completely out of control.

2.One monthly payment makes it easier to make the payment on time. Instead of remembering half a dozen different payment due dates, you only have ONE. No more worries about missing or late payments because one of your credit cards fell off the radar.

3.Having one credit card and one monthly payment lets you concentrate your efforts and apply a larger chunk of money where it counts. Add up all the minimum monthly payments that you’re making now. Then compare balance transfer credit cards by minimum monthly payments to see how it stacks up to your current monthly payment. Chances are that the amount of money you’re currently paying out to meet all of your minimum payments will be far above the minimum monthly payment on a balance transfer credit card – which means that with every payment you’ll be hacking away at the outstanding balance and making your way toward being debt-free.

How to Compare Balance Transfer Credit Cards
If you do the math and decide that a balance transfer credit card is the right decision for you, then take the time to compare balance transfer credit cards and find the best one for you. While 0% balance transfer cards still exist, the days of no-strings 0% cards are fading away. Most balance transfer credit cards have certain limitations and requirements for their use.

You can check out balance transfer credit cards on offer at comparison sites to compare the various terms and find the balance transfer card that works best for you.

Once you’ve transferred all your balances to one card, be careful not to run your other cards up to limit again. Your best course is to keep one credit card active for use in emergency – or for your everyday purchases – and pay off that card in full every single month. That way you won’t find yourself in the situation of paying down double the debt because you’ve run it up all over again.

You may have heard one of your mates boasting that they’ve been approved for a platinum credit card and wondered exactly what all the hullabaloo and fuss is over. Usually, it means that your mate is to be commended for keeping his or her accounts well in order but aside from that, each company that issues cards has different standards and features for their platinum cards.

First, understand that most finance companies that issue credit cards have many different products. Each of them allows you to make purchases on credit, but they each have different features that are unique to that particular card. One may offer a lower interest rate, but trade it off with an annual membership fee, while another may have a slightly higher interest rate and no fee as well as discounts for purchases made a particular merchants. Many of these companies offer a platinum credit card that is loaded with features for their best customers.

Each company’s platinum credit card is different. In fact, many companies offer more than one version. In general, it has a high spending limit, low interest rates and special features that are designed to make it attractive to those who use often. Those features may include cash back, special rewards, membership in discount clubs or auto clubs and even special rates on automobile or life insurance. They also, however, often have an annual membership fee you must pay in order to keep your card, which may make them less attractive than a less prestigious card.

In other words, even though these types of cards often require impeccable credit, don’t automatically assume that a platinum credit card is the best card for you. Depending on your reason for wanting a credit and your circumstances, another type of credit card may be the better choice. If you’re carrying outstanding balances on other cards for instance, you may do better with a balance transfer card that offers 0% interest rates for balance transfers. You may find that an option that offers a discount on petrol prices is the best choice for you if you travel a lot, or you may prefer something that’s linked to your favourite charity.

Before you make your application, it pays to compare all the features and charges of one against another. There are some really good comparison websites where you’ll find listings of dozens of credit card offers from all the major companies in the UK. You can compare interest rates, annual fees, cashback and rewards and other incentives online to help you choose the best credit card for you.

Many people will have heard about identity theft in the media lately. Identity theft is a growing problem in the UK, having originated in the US. It involves stealing the personal information of an unsuspecting person and using this information to get access to their bank account or other funds such as their credit card. These days, so much of our financial system is computerised that it is very possible to get away with thousands of pounds of someone else’s money, especially if it is on a credit card, before anyone will notice what has happened.
Most people will have a huge amount of funds available to them on their credit cards alone. In fact the average customer will often have as much as ten thousand pounds or more available to them instantly in the form of credit card debt. While most people would not wish to ever spend this much money on their credit card, it is available to them and if it were to be spent without their knowledge they would have a very hard time paying it all back.
This is exactly what an identity thief will do. They will max out as much of the credit available to you that they can get their hands on leaving you with potentially disastrous and crippling debts. There are not too many people who could easily afford to have ten thousand pounds of their money spent behind their backs without some serious consequences.
Credit card theft is also on the increase. There are many scams and schemes out there which will involve making you spend money on your credit card that you do not want to spend, or simply getting access to your account and spending the money for you without your permission or consent.
All of this has led many people to wonder just how secure their credit cards are. Well the fact of the matter is that you will not be held liable for all the money that is lost when you are the victim of identity theft. So long as you have had no part in the theft and it has not occurred due to some fault of your own, then you will only be liable for up to fifty pounds per card. This provides a great sense of comfort to people who are worried about identity theft.
You do have duties regarding this however. The first is that you must report the theft or loss of your credit cards as soon as is possible after you find out that they are missing. You must also not give out your pin number to anyone no matter what the circumstances. If you follow these simple rules, you will not be liable for the money others manage to steal from your account.
Chip and Pin, the much vaunted credit card security system brought in to combat credit card fraud has been breeched. Recently anyone using their credit card in any Shell petrol stations has been exposed to a new method of credit card fraud. It seems crooks have managed to plant a device into a chip and pin machine, which reads and stores a credit card holder’s information, including their PIN (Personal Identification Number)

In recent weeks, newspapers have reported that high street banks are slashing credit card limits and turning down more applications than last year. In addition, banks are purportedly monitoring credit card users more closely for impending signs of trouble. Bank chiefs say that, in the wake of increased levels of consumer debt, they hope these measures will cut the cost of servicing problem borrowers.

A Barclays spokesperson claims this has nothing to do with the recent credit crunch, but is a result of a review of credit card policies started last year – its actions follow Barclays’ disclosure of impairment charges of £1.5bn in its credit card business. The group is also thought to be looking for a buyer for its consumer loan business, FirstPlus, for less than its £4.5bn loan book value.

The Consumer Credit Counselling Service, the largest debt advice charity in the UK, said that demand for its services was soaring. “We received 18 to 20 per cent more calls to our helpline over the first six months of 2007 than in the same period last year,” James Ketchell, of CCCS, told The Times.

New international solvency rules, named under the banner Basel II, are set to affect banks’ policies on credit limits. The new rules require banks to have an extra capital cushion for unused credit in overdraft or card facilities. That imposes an extra cost on a bank if it offers a customer a credit line on which she is not currently drawing, and is a further incentive for banks to decrease customers’ credit limits. The rules come into action on 1st of January next year.

Even thought this may sound like bad news for consumers, a spokesperson from HSBC told Mortgage Strategy: “This is all part of the way we look at how customers are able to repay money, protecting them from fraud and meeting requirements of the responsible lending programme.”

Indeed, critics of the ubiquity of credit cards may welcome these recent events. The American documentary Maxed Out, released last year, for example, focused on how this ubiquity led to millions of Americans accepting credit cards without properly researching how they were going to repay their debts.

What this means for consumers looking for new credit cards is that it is increasingly important to compare different products in order to find the ones most suitable for themselves and increase the likelihood of their applications being successful. A higher credit balance might seem appealing, but ultimately, if a potential customer isn’t realistically able to keep up the financial commitment, another credit card might be better suited, leaving the card-holder and provider better off in the long-run.