Credit CardsPersonal Finance

Tips On Buying With A Credit Card 

Credit cards can be particularly useful if used correctly.

One of their main benefits is that they can be used to fund the purchase of larger items. Paying instalments over several months can help you to budget more efficiently.

Another occasion when credit cards can be a lifesaver is if you need access to cash in an emergency. Same day funding is also possible from Quick Loans Express who offer an easy, convenient and fast online application.

Despite their obvious benefits, we often read articles in the media about how people face spiralling debts because of credit cards. The main reason why they find themselves in dire straits financially is due to their incorrect use of these cards.

How can credit cards be used wisely?

Making Card Payments

Tips On Buying With Credit Cards 

If you choose to take out a credit card, it is very important that you make your repayments on time. Not only do delayed or missed payments incur additional charges/fees but the record of these missed/late payments are sent to all the main credit reference agencies. This will stay on your file and might make it more difficult to access other financial products in the future at a reasonable rate.

Credit cardholders with an introductory offer such as a zero-interest balance transfer might also find that this promotional deal is withdrawn and they have to pay a much higher APR.

To ensure that you don’t forget to make your monthly repayment, you should always set up a direct debit from your bank account.

Another common reason why people get into trouble with credit cards is that they only make the minimum repayments. Depending on the terms imposed by their card provider, this could be as little as £5 or 3% of their outstanding balance (whichever is higher). The best way to shop using credit cards is to try to pay off the outstanding balance every month as this will incur no interest fees at all. If this isn’t possible, you should try to pay off as much as you can afford.

Choosing the Right Credit Card

Tips On Buying With Credit Cards 

Before taking out a credit card, you should research the market thoroughly. Although the idea of offers like air miles and cashback might seem appealing, you should also look at the APR, the fees (monthly and/or annually) and any other supplementary charges. If your card issuer offers freebies like a reward scheme, this isn’t an excuse to shop indiscriminately. You should purchase products and/or services that you really need and would have bought anyway rather than to rack up extra points.

Apart from comparing the terms and conditions of each card, you should also ensure that you choose a card to suit your needs. If you travel abroad regularly, you should pick a card for this specific purpose and which offers competitive rates when used outside the UK.

Protection Offered by Credit Cards

Section 75 of the Consumer Credit Act offers you full protection for products and services worth £100-£30,000 purchased by credit card – whether in person or online including the Apple store.

This is another benefit of using credit cards to pay as you won’t lose your money in case of non-delivery or unsatisfactory/faulty goods. It also covers situations when your payment/deposit is lost because of a firm going bankrupt.

Despite all the obvious benefits of using credit cards, they must be used wisely when shopping. For instance, they should never be used for cash withdrawals from an ATM. Not only does this incur full interest from the day of its withdrawal plus additional charges but it will also appear on your credit file.

About author

Poppy loves personal finance almost as much as she loves her two cats, Tif and Taz.
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