Credit Cards: 5 Top Tips!

But First…

Credit cards enable consumers to make purchases on credit, i.e. the card issuer pays the business on behalf of the consumer and bills the consumer to repay the amounts on a specified date the next month.

While banks are known widely to issue credit cards to their customers, there are some retailers and independent providers that also issue credit cards.

You need to be aged 18 years and above to be eligible to apply for a credit card.

# 1The Good

If you are good at making regular payments, then using a credit card could actually be good for your credit score.

This is because it shows that you have a high level of creditworthiness, i.e. you can be trusted in taking out credit as you will return it in good and proper time.

The Bad Making late payments, or

missing payment due dates, or switching credit cards within a short period of time can indicate low levels of creditworthiness to potential lenders.

These can show up in your credit report and affect your credit score negatively.

Your credit card can affect your credit score in both good and bad ways

# 2 Credit cards can be safer than cash!

If your cash is stolen, it’s gone, but if your credit card is stolen or lost, you just need to call your credit card issuer to cancel it.

If you happen to make a purchase from a business that shuts down soon after, you’re most likely to be protected by your credit card – i.e. your money is reimbursed to you by the credit card company, as long as it is within a certain limit.

Check the terms and conditions that come with the credit card for these provisions though before you sign up to it.

# 3 Miss a credit card repayment – and it could hurt your purse!

Do remember that if you are unable to clear the balance that you owe to the credit card provider, you are likely to pay high interest and surcharges.

If you miss even one payment, the interest will start to pile on and you will end up having to pay more than you had initially borrowed.

# 4 Paying the minimum balance due can also be costly!

Your credit card provider may give you the choice of paying the balance off in full at the end of each, or pay a minimum amount.

If you choose to pay the minimum amount, you will probably end up having to pay interest on the rest of the balance owed.

This can make it longer for you to clear the total debt that you have on the credit card!

# 5 Your credit card activity is reflected in your credit report!

You would need to undergo a credit assessment, where the lender would run a credit check to see what your credit score is and may even check your credit report to see what your credit activity is like.

Before this happens, you can check your own credit score and credit report to see for yourself how healthy your credit activity is and whether you need to make any improvements to it.

Checking your own credit score and credit report does not affect it in anyway, by the way!

Check your credit score and credit report today at

!

.co.uk !