Abigail Foster

Hey, my name is Abigail Foster and I'm a proud partner with Compare the Market.

My background, so I'm an ACA chartered accountant. I'm the founder of a financial education company that teaches finance in schools all over the UK from year 1 to year 13. I'm also an author. I wrote my first book last year with Penguin called The Money Manual. I'm a content creator and a presenter and I present on radio and TV on a weekly basis.

It was really important for me to partner with Compare the Market because they are such brilliant advocates for financial literacy and financial awareness when it comes to saving money.

Anything from energy to home insurance to car insurance, credit cards, we're going to be talking about it all and helping you understand all the ways you can be saving money and getting the best deals. Also, how cute is Oleg? Stay tuned for tips and tools.

Hey, I'm Abi Foster, ACA chartered accountant and finance content creator. And today we're talking about credit cards. I know a lot of people fall into one of two camps when it comes to credit cards. You either love them and you use them for every purchase, or you hate them and you never use them. But the thing to understand about credit cards is they're mainly just a financial tool. Used correctly, they can help you protect your purchases, earn cashback, and even improve your credit score. Used incorrectly, they can leave you in debt for years and years. So today I want to bust some of the myths when it comes to credit cards.

Myth number one, the minimum payment is designed to help you clear your debt faster. False. This is one of the most dangerous ones out there. The minimum payment is exactly what it says it is. It's the minimum payment your credit card provider will allow you to pay each month before they've basically assumed that you've missed the payment. Let's imagine you have £3,000 on a credit card. If you only paid the minimum payment, it could take decades to wipe this with the minimum payment and the interest and late payments that you may be paying.

Myth number two, paying your credit card off early saves you nothing. Absolutely false. The quicker you pay off your balance, the less interest you're likely to pay. So interest is what the credit card providers will charge you if you basically don't repay on time because you're borrowing from them. That is how credit cards work. A credit card is your borrowing from the bank and then repaying that hopefully in full every single month.

Myth number three, section 75 only applies if you pay the full amount on your credit card. False. This is one of my favourite facts when it comes to credit cards because so many people don't realise that this exists. Section 75 is a protection that you get on purchases that you make on your credit card between £100 and £30,000. So, if something goes wrong with the product or service that you've bought through your credit card, your credit card provider is jointly liable with your retailer to get that money back.

Myth number four, being rejected for a credit card doesn't matter. Unfortunately, it does. Being rejected for any debt can impact your credit score. In the UK, we have three credit rating agencies, Experian, Equifax, and TransUnion. And each of them give you a credit score based on your credit profile.

Myth number five, you should never use your credit card for everyday spending. This one does come down to the individual. I personally do use mine for everyday spending, but I keep a seriously tight check on everything I'm spending on a week-to-week basis really because I use my credit card to make sure that I'm building points or I'm getting the cashback.

So, the big takeaway here: credit cards aren't evil but they're not magic either. Used correctly, they can help you with protection from section 75 and rewards and bonuses, but if used incorrectly can land you in tonnes of debt for decades and interest that you're just spiralling out of control.