Your Credit Card Guide with Top Tips from Credit Card Sorter

Credit Card Guide

What is a credit card... The usual terms... How to apply for a creditcard

Interest and Credit Cards... Low interest credit cards... When does the interest charge start... How interest is calculated.. How to get interest-free credit... The APR and Credit Cards...

Introductory deals / special offers... Crad Introductory interest rates...

Card Purchase protection... Faulty goods... Anti fraud guarantees... Emergency cards / cash... CreditCard Protection... Stolen cards / Fraud... Internet crad fraud...

Reward schemes... Cashbacks... Cash withdrawals... Holidays and your card... Free Travel Insurance...

Never heard of the card issuer?...

Minimum payment amounts... Credit Card Statements... Annual Fee... Late Credit Card payments... Credit Limit...

What is a credit card?

A credit card is a little plastic card (measuring 2 by 3.5 inches) which you can use to buy things with instead of money. (Well you wanted basic didn't you?)

Credit Cards are issued by various types of organisations, typically banks, building societies and supermarkets.

When paying for something, you give your card to the retailer who gets you to sign a coupon. The card issuer pays the retailer and then gets the money from you at the end of the month, when they send you a statement.

You can also use the card for ordering things over the phone or the internet ie without signing the coupon.

Convenience is one of the major attractions of having a credit card.

Not all plastic cards are credit cards. There are also store cards, charge cards, debit cards and so on. They may seem similar but operate in differing ways. (There's further information on each of these in other types of plastic)

The usual terms

Each card issuer has their particular terms and conditions. These are usually along the lines of:

You're sent a monthly statement detailing all your purchases.
You have to send a payment in response to this.
If you pay off the full amount owed you aren't charged interest.
You have an agreed credit limit ie a limit to how much you can spend on the card every month.
You're given a period to pay off the debt - say 2 weeks.
You're charged interest on whatever you don't pay back within the agreed period. (This is shown on your next statement).
You have to pay off a minimum amount every month.

The card issuer also gets paid a percentage of the items you've bought, by the traders. (2% to 5% of everything brought with their cards is a lot of money).

This is why some card providers will offer very good deals to entice you in.

Not all seem to bother though so it really is worth shopping around for them See Latest Card best buys.

How to apply

When you've chosen your credit card you'll have to complete an application form asking for your personal details eg full name, date of birth, address etc.

The card issuer will then check you out with a credit reference agency.

The process should only take a couple of days.

Some card issuers offer online application procedures which will give you an "immediate" answer.

However, even though this should make things quicker, they will still need your signature. So they'll contact you by post as well.

If you are refused a card click here to read more

Never heard of the issuer?

Don't worry if you've never heard of the card issuer before. The main banks etc used to have the lions share of the market but - because it's so lucrative - a lot of new players have entered the game and may well have the best offers.

All card issuers have to be licensed so you can have some confidence regardless of how well known they are. (Besides, if they go bankrupt, you would only lose money you owe.)

Credit Card Statement

This is sent to you monthly and details all your transaction. It will tell you the minimum amount you have to pay and by when.

You should always check through your statement carefully to spot any errors. This will probably be the first time you can see any evidence of your card being used fraudulently. If so, call the card issuer immediately.

Annual Fee / Annual Charge

This is when the card issuer charges you a yearly fee for the privilege of having their credit or charge card. While some card issuers will offer various goodies in return the experts say that the annual fee is hardly ever worth paying.

However there seems to be a new trend by some card issuers to stop their annual charges and replace them by various hidden credit card charges. With this in mind it may be better to pay a simple annual charge - as long as extra / hidden credit card charges don't come with it.

Late payments/ Agreed payment deadline

Your monthly statement will tell you the date a minimum payment should be received by. If you get it in later then you'll be charged extra interest.

Usually you have 3 to 4 weeks after receiving the monthly statement. The longer the better - in case you're late paying and are charged interest.

Credit Limit / Spending Limit

Your card issuer will give you a monthly limit to how much you can spend with the card every month. If you want to raise it you can ask them.

Whether you're succesful depends on how they rate your creditworthiness.

You may be offered an increased credit limit automatically as some kind of reward... Life being what it is, it's unlikely you'll be offered this if you want it and unlikely you'll want it if you're offered it...