Credit Card Tips
Using a credit card wisely is key to getting the most out of it. It is vital to keep an eye on your spending and pay off any debt on time or clear balances as fast as possible to avoid being hit by penalties. Here are more tips on how to save money with your credit card.
Save money on payment protection
Payment protection insurance policies can represent poor value for money, when compared with income protection or health insurance policies.
Don't use your credit card abroad
Every transaction you make outside the UK (including online purchases from many websites) may incur an international processing fee, which may be as high as 3%.
If you withdraw cash from an ATM machine, you will also be charged a handling fee in addition to this, so best to avoid this.
Pay off your balance
If you have more than one card, you may save more money by paying off one card in full, rather than by paying off small amounts on each of them. Alternatively, you may be able to make savings by arranging a balance transfer between your cards.
Avoid late fees
If you miss a payment, or go over your limit, most issuers will charge you a late payment fee, due to the extra administration costs they incur. Regular late payments will also show up on your credit file, and may make it harder for you to borrow money in the future.
The best way to avoid late payment charges is to set up a regular direct debit to pay at least the minimum balance each month. However, you should always try to pay much more than this, and ideally you should try and pay the balance in full each month. If you can afford to do this, most card issuers will give you this option.
Compare credit card offers
When looking at credit card deals, always make sure you are comparing like with like. Remember that 0% APR deals usually only last for around six months, with the interest rates often going to much higher levels than this afterwards.
Cashback and reward cards
Remember that cashback credit cards or cards with other reward schemes usually have a higher interest rate. These cards are only good value if you pay off your balance in full each month.
One at a time
If you are rejected for one credit card, it is best to check your credit file and then wait a few months before applying again.
