Why Credit Cards are a useful way of paying for Goods or Services.
Instead of carrying large amounts of cash, you can fit this small plastic card very easily in your purse/wallet.
Not only this, you are provided with a credit limit (e.g. £5,000.00 – this means that you cannot spend over £5,000.00 without first arranging with your provider). You can pay for goods and services (including on the internet) even if you don’t have the means to pay in full straightaway as you can pay little by little every month.
You can pay for your goods/services in full by credit card and you get extra security under The Consumer Credit Act 1974:
a) If you receive unsatisfactory goods and services you can sue the supplier, provider or both.
b) If the contract is unfulfilled (perhaps the supplier has gone out of business e.g. a holiday company) you can sue the provider.
Then there is the increased security through chip and PIN method – when paying for goods and services you will be asked to enter your PIN into a keypad rather than signing a receipt.
Providing you remain within your credit limit you can repay your provider as much as you want as long as you repay at least a minimum amount each month (typically 2% of the outstanding balance shown in your monthly credit card statement)
How is a credit card obtained?
Find a credit card company that is running a promotion at the moment and complete an application form. This can be done completely online in many cases - click here to view our selection of recommended credit cards.
Once your application has been accepted by the provider you will receive a credit card with a credit limit and terms and conditions together with your PIN. Sign your credit card at the back and note the PIN supplied (you can always change the pin to the one to your liking if you so wish).
From then on there is nothing more to do except to spend within your credit limit making sure to pay off at least the minimum amount shown on your credit card statement each month.