Are credit cards useful?
Credit cards can be a useful aid when paying for goods or services and an affordable way to borrow money in the short term. But if you can’t pay off the amount you owe each month, they can become expensive and can lead to a cycle of debt if they aren’t used sensibly.
Credit card FAQs
Credit building cards
Applying for a credit card
0% purchases credit cards
Frequently asked questions
What interest free credit cards are there to choose from?
With Compare the Market, there are many different types of credit cards to choose from. These include zero per cent balance transfer credit cards, where you can move your debt from your current card to a new one and you won’t be charged interest on that amount for a set period (although you may have to pay a fee to transfer the balance and, don’t forget, you’ll need to keep up the monthly minimum repayments).
There are also interest free purchase credit cards, and these offer zero interest on your spending for a certain period of time (again assuming you keep up the minimum monthly repayment). After that you’ll be charged interest on any outstanding balance.
There are also cards that offer 0% on both giving you the best of both worlds – for a certain period of time. Here’s what you should consider before shopping around for a credit card with zero interest rate on balance transfers and purchases.
Why is checking the Annual Percentage Rate (APR) important?
Given that you’re considering a credit card with two benefits, you should match this by double-checking the rate of APR. It’s important that you’re clear on how much you’ll be liable to pay on any outstanding balance once your zero rate of interest expires.
For example, let’s say your APR rate is 18 per cent and you borrow £1,000 on your card; the interest charged on top of your balance for 12 months will be £180, so you’ll end up paying back at least £1,180. There could also be additional charges, such as late payment fees, depending on your terms and conditions.
Are you trying to limit how many cards you get?
Each new credit card application leaves a record on your credit history, which can make it more difficult to take out other types of credit in the short term. Providers can view you as applying for multiple lines of credit at the same time, which can indicate financial difficulties and they may be more cautious about lending to you.
Therefore if you’re eager to keep the number of cards you have to a minimum, you might find a card that offers zero percent interest on balance transfer and purchases would be better for you.
If you are worried about your credit score and think you may have bad credit, then you might want to consider a credit building card to help improve it.
Have you thought about other fees or charges?
Before deciding on a credit card, it’s worth remembering that any benefits you might get will be lost if you don’t stick to the terms and conditions of your cards and you could start racking up fees.
How do I compare?
You should always check the details of any credit card deal carefully so that you know exactly how long the offers last for, as well as any other key terms and conditions.
You might want to consider other types of credit cards, including those that offer cashback and rewards, so why not start a comparison with us to help you find a card that best suits your needs.