Credit cards are a way of handling debt for many people. They generally charge a higher rate of
interest (APR) than other forms of lending (e.g. arranged overdrafts,
secured loans,
remortgages,
personal loans etc) but in return offer more flexibility in how the money can be accessed, and also what it can be spent on.
There are several credit card
calculators online, and the company you apply for a credit card from will generally have one for you to use before applying. The
calculator should show you such things as the current
rate, how much you will have to
pay off each month, and any other relevant
advice relating to that card specifically.
Credit cards can be given out to specific individuals for different reasons:
- Students can get them for debt consolidation reasons (and should benefit from a lower rate of interest as well as other rewards). Colleges and universities should be able to advise students further, but the main concern for students should be to ensure that they will always be able to repay the minimum balance monthly so as to avoid any unnecessary charges and credit history black marks.
- Businesses (including small businesses) can obtain cards specially designed for this purpose. These can then be given to specific employees for use on expenses, petrol and other needed purchases.
The best way to obtain a credit card is to compare all the offers currently being advertised in the market.
Special offers are generally given in areas such as:
- Balance transfer fees
- Interest rate (APR) reductions
- Interest free (0 APR) periods
- Cash back rewards
- Payment holidays
Remember, there are many companies out there offering credit cards, so take your time and choose carefully. Also bear in mind that only repaying the minimum each month will lead to your balance remaining on the credit card for longer.
