Posts tagged: credit card

Things To Look Out For When Applying For A Credit Card

deal with your cardsIf not managed properly, a credit card can have a massive negative impact on your credit rating. For this reason, you shouldn’t just apply for credit cards on a whim; You need to weigh up all the pros and cons and all the benefits before making any decisions. Shopping around to get the best deals on your credit card is always a sensible option, so here is a list of things that should look out for when you do.

1. Annual Percentage Rate (APR)

This is the cost for using the card if you don’t pay off the balance in full every month. Have a look around for credit cards with the lowest APR, so that you have to pay less interest back if you can’t pay the balance off in full for a month or two.

2. Credit Limit

This is the amount of money that the credit card issuer has agreed to let you borrow. This amount will vary depending on your credit score, current financial situation, and other facts. Because of this, you could be offered anything from a couple of hundred pounds to thousands. Regardless of your credit limit, you will want to avoid spending anywhere near your credit limit, as this will negatively impact your credit score.

3. Annual Fee

Some cards add a fee on top of your balance each year for the use of your card. Like with the balance, you will have to pay interest on this fee unless you can pay the full balance at the end of the month.

4. Charges

Ensure you know of any possible charges for using the card, going over your credit limit, spending money abroad, or making late repayments to avoid any nasty surprises. You can check this on your credit agreement.

5. Minimum Repayment

Even if you can’t afford to pay the full balance each month, you will still be required to make a minimum repayment. This doesn’t tend to be more than around £5 or 3% of your balance, but you should try to pay much more than this otherwise it will take longer and cost much more to pay off your debt.

6. Cash Back

Some credit cards will refund you a percentage of your spendings back onto your card. Even if a credit card advertises cash back, you will want to check the small print, as they may only offer this for customers who spend less or more than a certain amount, or ones who have paid off their balance in full at the end of the month. Websites like best.creditcard compare the cash back offers from a range of different credit cards, as well as other benefits.

7. Points & Rewards

Some credit cards offer points every time you spend money which can later be converted into different types of rewards. These rewards can include vouchers, loyalty points for supermarkets, or even football merchandise.

Be sure not to apply for many credit cards in a short amount of time, as this will harm your credit score. Instead, compare the benefits and see which one fits you best, and ensure you make your repayments if you are accepted.

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Being Self-Sufficient When Self-Employed

premium payablesAs more people are leaving their very insecure permanent jobs and going down the self-employed route, there doesn’t seem to be many financial preparations for the future anymore. And it’s hardly surprising, given the current nature of unpredictability in the market. People are setting up their own businesses, and approximately 9 out of 10 small businesses are failing because people are ill-equipped, or the financial strain is way too much for them to bear. Living a lifestyle of self-employment can be all about living day to day while working all the hours under the sun. While this isn’t the most fruitful way to live your life, how can you make the most of a delicate financial situation while working for yourself?

Assess The Real Amounts Of Outgoings

Living in a hand to mouth way means that you seldom stop and take notice of how much you’re spending. If you get a big contract, you may feel that you are in the money and spend quite lavishly, which leaves you out of pocket when you’re left wanting for work. The best way to tackle this is to establish a base level of spending and stick to that, though it’s worth doing this when you’re in a good working contract and not when you’re struggling. Look at your outgoings and cut back on what isn’t essential. Have you been to the gym in the last 6 months? No? Get rid of it. Getting a selection of credit cards is handy when you’re self-employed is handy for expenses, but not for buying everyday items. The best way to avoid temptation is to lock them away and avoid remembering the PIN number. If you have pressing payments when you’re in the middle of a contract, you could use a credit card to make the payment and then use your earnings to pay off the card. With costs like insurance, you can pay insurance premium by credit card which helps to spread out the debt over a longer period of time. It all depends on the rate of the credit card you have. It is always ideal to have a 0% card for business expenses. So if you needed to travel to another country, the card could pay for the travel insurance.

Look At What You Can Claim Back

One thing that newly self-employed people forget about is what they can claim as expenses. Depending on where you live it varies, but if you operate out of your home, you can make the most of cutting back on your energy bills if you use one of your rooms as an office. So if you have a phone set up, the internet, and of course, all your electricity usage for your business coming out of this one room, you could try and claim some money back on your bills. The rules differ, but you can always speak to an accountant to get the bearings on this situation. Self-employment is a feast or a famine, but saving money is possible in light of circumstances. Just do your research, and make the most of what you are entitled to.

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The Ins And Outs Of Buying Your First Credit Card

your credit cardCredit cards are an ever expanding form of payment in the financial world, for both the consumer and the provider. If it is your first time buying a credit card, it can be quite overwhelming and confusing on what it all means. Here is a simplified list of what to expect from owning and using a credit card.

The Procedure of Making Payments

A credit card allows you to make instant purchases without the requirement of physical cash. Whatever provider you choose, you are set on a prearranged amount of money which you can spend on, but must pay back. This is when it gets a bit complicated, so let’s clarify. After a purchase, you have a ‘grace period’, which means you have up to 56 days to pay off the card without incurring any interest. Ensure that you never delay the payments of your bills. If you do, you can expect to have unexpected charges and penalties to pay off.

How to Keep your Financial Details Safe

We all like to feel secure when it comes to money, which is why it’s important to understand credit card safety. As soon as the card arrives in the post, sign the back of it straight away. This means that if it gets lost or stolen, you’re protected. Never give your account number to an incredible source. This includes giving any information over the phone (unless you initiated the call and talking to a bank), posting anything on social media or answering emails which ask for personal information (a bank would never do this). Check your account activity regularly for purchases which you haven’t made, either online, on the phone, or through paper statements, it’s easy and doesn’t take up a lot of time. If you feel like you’ve made a bad decision or the card looks fake, you can establish the legality of your card by using a reliable credit card validator. Finally, if you have lost any cards or feel like any fraudulent activity has occurred on your bank activity, go with your gut instinct and contact your bank or card issuer.

Features of a Credit Card

Many credit card users don’t understand all of the features which come with it. The biggest quality of a card is the credit limit which is attached. For first time consumers, a lower limit may be set by the issuer, meaning you need to watch how much you spend. Contact less payments are great for quick and efficient payments, especially when you’re in a hurry to get home for the football game. Any purchases under $100, simply tap your card against a contact less reader to make a fast purchase. You can also use a credit card for cash advances and balance transfers. Specific credit cards come with extra features such as, international travel insurance, extended warranty with best price guarantee cover and complimentary airport lounge access. Before deciding on a credit card, do your research and pick the best one which suits your needs.

Expert or not, credit cards can catch out the smartest of users. Which is why it is essential to always plan ahead and utilize the web for helpful information.

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Finding the right credit card for you – it’s easier than you think

Choosing right credit cardWhen you begin the search for a good UK credit card, you are likely to encounter a vast amount of information. A lot of this information can be conflicting, as well as confusing, and you might feel that you will never be able to root out the best credit card deal to suit your circumstances.

The way to find the best credit card for you is to cut through all the waffle and jargon and simply focus on what you need from a credit card. Once you know this, you can narrow down your options so that there are only a small number of deals to compare and to choose from.

What type of credit card is best for you?

To get the best credit card deal, you need to understand your spending patterns and to have a good grip on your finances. This will help you find a card that you can afford and that suits your needs. Here are a few examples of credit card types along with who they are best suited to:

  • Credit cards with low interest rates (low APRs) – these may attract your attention, but they are not for everyone. These are best if you want a card to use only occasionally and that you can afford to pay off in full each month. If you want a credit card for a specific purpose, this is not the option for you.
  • 0% balance transfer credit cards – these cards, which give you 0% for a limited period (i.e. 12 months) are designed for people who already have debt and who will be able to pay off that debt by the expiry of the 0% period. They allow you to transfer the balance (debt) to the 0% card so that you get a better deal and can more easily manage your debts.
  • Cash back credit cards offer you money back on everyday purchases on everyday purchases, which is very beneficial but only worth it if you can your balance off in full (or very nearly) every month.
  • Low-rate life of balance credit cards – similarly to balance transfer offers, these cards allow you to switch existing debt over to a new card. The difference is that these cards give you a guarantee that the interest rate on the debt won’t increase as long as you can make minimum payments each month. These cards are best for people who can’t afford to completely clear their debts before 0% offer periods run out (usually within 12-18 months).
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What Information Will You Need When Applying For A Major Credit Card?

While applying for Credit cardsThere are many questions that you are assuredly going to be confronted with when applying for a credit card. These questions are important to answer, and answer honestly because of the credit card companies need for accurate information. The information that you provide will help them to determine what credit card is right for you and what financial offerings they can provide you through their institution. Lying about this information is not only problematic but also fraudulent. Whether you are applying for credit through a large institution, such as would be the case if you were applying for a Lloyds TSB or Barclays credit card for example, or are just looking for more data for a future application, the following is some of the common information that you will most likely be asked during this process.

Income

Though personal, a credit card will assuredly be asking you what your income level is. They will want to know what your annual take home is and may want to know what the monthly is as well. This information is important to a credit card company for many different reasons. First, it will help to determine how much financing and credit they can provide you with. They do not want you to be at risk of being unable to pay so knowing how much disposable income you have can allow them to provide you with an appropriate amount of financing. They will also want to know what income bracket you fall within to better help determine the type of credit card that is right for you. An individual with a high level of income may be eligible for a bonus or rewards card, while those with less monthly income or annual revenue may not. This serves as a protection to both the credit account holder and the lending institution.

History

Before issuing a line of credit to an individual, the financial history of that individual will be assessed. This is done by doing a credit report. The individual applying will have to provide information on application that agrees to this assessment. If not, they may not be able to move forward in the application process. A bank or credit card company wants to know that their risks are worth it. If an individual does not have an established credit history or has one that is highly flawed, this can reduce the chances of them issuing a card. If the individual has a stellar report, they may be more inclined to accept the application and even to increase the amount of credit that is issued. Either way, it will be unlikely when applying for a credit card that you will be able to move forward without answering questions regarding your credit history.

Employment

Another way in which a bank or financial institution will seek information on an application for a credit card is to ask for your employment history. This is important because it shows whether an applicant has a consistent source of annual income as well as how stable their career is. This section may or may not be included on the main application, but you should be prepared to answer it just in case.

Laura was getting ready to apply for a Lloyds TSB credit card. To prepare, she wanted to gather all the information that she may have needed before beginning the process.  Then she created the above list to help others.

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