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Credit Cards

Credit cards Credit cards seem to get a lot of bad press, but if handled responsibly a credit card can be an extremely useful tool. As with all forms of credit, you have to be aged 18 or over to apply for a credit card. Credit cards allow you to purchase goods or services, without the need for cash. However, because you never really see how much you have spent until you receive your next bill, it’s very easy to overspend. This is why it is important to use your credit card wisely. The way in which a credit card works is quite simple. When you have made your application for the card, the lender will assess whether or not they are willing to issue you with one of their cards. To do this they will assess the answers that you have provided on your application, and will also complete a credit check on you. If all goes well, and they agree to issue you with a card, then you will be sent the card in the post, along with a personal identification number (PIN number) for security purposes. The lender will also inform you of the ‘credit limit’ that they have issued you with. Your credit limit is the amount that the lender will allow you to spend up to. You should try and stay within these limits, or you could find yourself having some pretty hefty charges added to your account. Once a month, you will receive a statement from the lender, which will detail all of the transactions made on your account each month, and they will also request a payment to be made. The payment that they ask for will normally be for a small percentage of what you owe, however, interest will be added to your account if you do not pay the full amount off. For this reason, it’s best if you only use your credit card for small purchases each month, and pay your bill in full each month. This way, you should be able to avoid paying any interest, and only pay for what you bought. If for any reason you think you may need to go over your limit, you should make sure that you contact your card issuer, as they may be able to help. All you will achieve by not contacting them is a nasty letter, and a whole load of additional charges.