Changing Credit Cards
Find a better interest rate on your credit card
These days, there are many different credit card options available
and because it is such a competitive market there are some really good
deals around, with lots of added extras for the consumer. Also, changing
your credit card provider is now easy to do, and many credit card companies
offer the bonus of zero interest rates on your balance transfer.
Changing credit card providers can be a wise financial step, done to
take advantage of low interest offers rather than just an emergency
move because the monthly card payments are getting out of control. To
be a 'credit card tart' (regularly changing to get the best deal) is
admired these days, where it is now well accepted that it's best to
'shop around' for all services, rather than sticking out of a sense
of loyalty to a specific bank or company.
In the UK consumers spent a record £31 billion on credit and
debit cards in the build-up to Christmas, recent figures from the card
industry have revealed. Credit cards are the most popular option for
internet purchases, due to the extra security they offer with purchases
of £100 or more being protected under the consumer credit act.
Credit Card choices
There are many different credit cards on offer, but you will find that
most cards belong to one of the six main payment-card systems : MasterCard,
Visa, Maestro, JCB International, American Express, Diners Club.
You need to decide what you want from a credit card before you can
choose the right one for you. Credit cards now come with many incentives
to attract new borrowers, such as: bonuses, points, cash-back, air miles,
free travel/purchase insurance and most importantly low interest rates
and 0% balance transfer rates.
Credit Card Deals of the Month
No annual fee and cash back rewards
If you pay off the balance every month then the interest rate is not
that important to you as you don't have to pay any! However, you don't
want to choose a credit card with an annual charge. Verify that the
credit card provider doesn't charge an annual fee and also check the
length of the period between being sent a statement and having to pay,
before you sign up to any agreement.
Credit cards that offer cash back, such as American Express Platinum,
refund a percentage of your spending which varies according to the amount,
beginning at 0.5%. The cash back is usually deducted from next month’s
purchases.These credit cards are really only worth considering if you
are going to pay off the entire balance every month. There are many
rewards and incentives offered by credit card providers such as air
miles or free travel insurance which you need to decide whether they
would be useful to you.
Low or zero interest rate
The reason most people consider changing their credit card is because
of the high interest rate. A debt can soon double with high credit card
interest. Many credit card companies now offer 0% interest on balance
transfers and purchases. Some cards allow you up to 56 days between
buying and having to pay for it. Check that the low interest rate applies
to new spending, and not only to your transferred balance. Some card
providers offer both, others only on the transferred balance.
Changing credit cards to take advantage of a lower interest rate is
a good move, but it is important to recognise that such offers are usually
for a limited time. Due to heavy competition the Credit card companies
seem to have extended this recently to around 12-13 months. The financially
clever pay off the debt before they become subject to a higher interest
monthly payment again. If you are planning on taking advantage of a
zero or low per cent balance transfer rate, check carefully that there
are no fees associated with the transfer.
Credit card protection
When using a credit card to purchase goods or services costing between
£100 - £30,000, the Consumer Credit Act (Section 75) legally
protects you. You can claim against your credit card provider if something
goes wrong with your purchase. Because of this 'connected lender liability'
it makes sense to use your credit card when making big purchases for
your own legal protection.
Some card companies offer purchase protection, in addition to the legal
protection of the Consumer Credit Act. You generally only qualify for
this extra protection when you spend £100 on one purchase.
Credit Card warnings
There can be hidden costs with some credit card companies for certain
transactions, known as 'handling fees', or 'withdrawal fees' if you
use your credit card to draw cash - usually around 2.5%. For this reason
getting cash out with a credit card is not recommended, also your interest-free
period won't apply to cash transactions.
Juggling too many credit cards is not a good idea, as well as being
difficult to manage monthly, it can have an adverse effect on your credit
rating if your prospective lender decides you hold too many credit card
debts. Credit rating agencies can monitor the number of credit cards
you use, and can request reports from credit card providers on your
payment history.
Credit Card Debt too High
Refinancing by incorporating all your debts into one loan - a Debt
Consolidation Loan - can reduce your monthly payments and enable
you to take control of your finances. There's no obligation, no catches,
no charges and the whole service is 100% confidential. Call us now on
0800 043 7474 or complete the enquiry form and one of our experienced
advisors will call you to discuss your requirements.
Loansite is a Limited
company based in Cardiff, UK.
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