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"Your Rough Guide to UK Credit Cards"

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Low Interest Credit Cards

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




Interest

When you borrow money the lender makes money by charging interest.

If you've borrowed £100 and the interest rate is 5% that means you would be paying £5 in interest - so you'd have to pay a total of £105 back

Interest charges in relation to Credit Cards are usually referred to as being monthly (typically 1 or 2 per cent) or annually (APR) say 10%.

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Low Interest Credit cards

The idea is to get a credit card with as low an interest rate as possible.

Most card companies only charge interest if your payment is late. But note When does the interest charge start

Typically they send a statement listing your payments for the previous month. You are given a date by which to send them a cheque, which is usually a couple of weeks.

If you don't pay it all or can only pay some of the debt you will be charged interest. The lower the interest rate the better.

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Finding Low Interest Cards

You need to look at the latest best buy tables. These list the interest rates in order of discount.

However be careful that you're not just seeing a Headline Interest Rate. The more accurate term for this is the misleading interest rate.

The only way to truly compare interest rates is by using the APR - the annual percentage rate.

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When does the interest charge start

Some issuers charge you from the date you brought the item. So you're paying them interest even before you get their statement.

This might only be good for you if the interest rate is very low and you know you won't be paying off your debt each month.

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How interest is calculated

In varying ways: It could be:

As an Introductory rate where the issuer will, entice you in with a low rate for a particular period. See Introductory rates

Monthly; usually between 1 and 2%

As an APR. This is legally required and includes all charges as well as the interest rate. The card issuer has to state what the APR is.

When trying to compare the various deals on offer expect to be confused. It's called confusion marketing and it works because we simple souls tend to just give up and plump for the product that's closest to hand - in other words the one we've noted because of some suspiciously good offer.

The best and only easy way of comparing credit cards is using the APR

It is a legal requirement for any lender to quote you the APR. So if there's any hesitation in telling you what it is, call the regulator, The Financial Services Authority. Tel 0845 606 1234

Always check the terms and conditions

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How to get interest-free credit

Choose a card which only charges you interest for late payments (ie not from the time of purchase)

Pay off the balance owed within the time allowed

The longer the time allowed to repay, the longer your interest free credit lasts for. So look for cards offering this. (See latest best buys)

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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...

 


All material UK Credit Card Guide and Information © Moneysorter Ltd 1999 - 2013 | Author: By Ed Parry