UK Credit Cards
The types of UK credit cards are varied, offering something for almost everyone. Banks in this part of the world provide different cards, some that go beyond what would be offered through a more conventional type of card. For instance, some UK credit cards come with excellent rewards programs connected to a specific type of spending or store. In addition, some cards are designed to help people with poor credit rebuild credit, which is great for people that would not qualify for other UK credit cards.
The following is a list of the more popular types of UK credit cards that people choose:
• Balance Transfer – These UK credit cards make it possible for a person to move a balance from a high interest credit card to one with a lower rate. These cards come in a variety of options but in most cases, the issuer would offer a 0% or low APR introductory period, usually from three months to one year. Once the balance has been moved over, the cardholder has the opportunity to pay the balance down significantly or off in full because of not being charged outrageous interest.
• Cash Back – Another popular choice for UK credit cards are those that have cash back programs attached. The way this works is that for every purchase the cardholder makes, a point accumulates. Once the cardholder has enough points, they can be redeemed for cash. The exact equation of purchase to point, as well as the minimum accumulated points varies from one issuer to another. In addition, some of these UK credit cards allow earned points to be redeemed for discount on travel, hotel stays, rental cars, gifts, and gift cards.
• Prepaid Card – This type of card requires the cardholder to make a deposit upfront, which then becomes the amount of money available to spend. While a prepaid credit card is similar to a secured card, the primary difference is that in most cases, once the available balance is used, the card is void.
• Secured Card – For the secured card, the cardholder would deposit money into an account, which then becomes the spending limit on the card. For these UK credit cards, the issuer sets the minimum and maximum deposits amounts allowed. As an example, if the cardholder deposits $500, the card would be loaded with $500 for spending. As the available money is used, the individual could continue making deposits as long as he or she stays within the minimum/maximum guidelines of the issuer. While beneficial for people just starting to establish credit or those with a poor credit history, the only downfall is that rates and fees are usually higher than charged on a conventional card.
Just as with cards issued through other countries, UK credit cards are offered through the primary companies such as Visa, MasterCard, American Express, etc. In addition, people would have options for different levels and types of cards. In other words, a person could apply for a silver, gold, platinum, purple, or black level card. Of course, some of these cards have extremely strict approval guidelines so it would be important to know the type of card a person would be approved for rather than wasting time apply for cards that would result in denial.
Overview of UK Credit Cards
UK credit cards are much like credit cards offered in the United States and Canada. The primary difference has to do with the issuer. In addition, some UK credit cards are worth having while other credit cards should be avoided. For instance, if you have poor credit, perhaps a history of late or missing payments, a County Court Judgment or CCJ, or you are in the process of trying to get your credit repaired, you will find a number of UK credit cards available.
The challenge in this case is that some issuers are misleading. In other words, some issuers of UK credit cards take advantage of people in this type of situation. Therefore, they will spin marketing of credit cards that make them appear to be the perfect solution. Unfortunately, these companies fail to tell applicants about the hidden fees, high interest rates, and tight restrictions only for the cardholder to find out after making purchases.
Although finding a great UK credit card for someone with bad credit can be challenging, it is not impossible. Typically, credit card companies and banks will suggest the person spend six to twelve months getting his or her credit cleaned up and then apply for a card but if someone needs a card prior to this, there are some offered. Again, the key is for all the information to be read carefully so nothing is overlooked.
Most often, UK credit cards for people with bad credit will have much higher interest rates. The reason is that the issuer needs some type of protection for going out on a limb to offer the card to a person with less than perfect credit. On the other hand, the individual with good credit can secure just about any UK credit card wanted. However, even for the person with flawless credit, taking time to read information is essential.
For people with good credit, a number of excellent offers are now available for UK credit cards. In fact, many companies have made significant changes, making it less expensive for balance transfers and providing much lower than normal interest rates. As an example, Virgin Money is now providing a 0% Annual Percentage Rate for balance transfers for a nine to twelve month period. Of all UK credit cards, this issuer has the best deal by far. However, the 0% APR for new purchases has a much shorter introductory period.
Another issuer of UK credit cards that is a good representation of what the country offers is called Halifax One. For this, the APR is at 0% for balance transfers, as well as new purchases but only for nine months. Additionally, the regular Annual Percentage Rate of 15.9% has recently been lowered to just 9.9% although to qualify, you would need good credit. The negative is that Halifax One has increased the balance transfer fee to 3%.
Many of the issuers of UK credit cards have been making changes over the past few months. In many cases, these changes involve the regular APR being increased but a few have lowered it. One of the biggest changes seen is that some of the global credit cards to include American Express are no longer offering balance transfers to people in the UK. Whether you have good or bad credit, it is important to shop around for the right issuer and the right card.
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