Get Yourself A Decent Credit Card

There are some big-name credit cards that might charge the earth for you to have the privilege of carrying their name in your wallet. Most of them are not worth the extra fees. But what makes a card worth its salt? And what steps should you take in choosing the right card?

Firstly you need to make sure you get a rate and the features that suit your needs. You certainly do not want high standard interest rates or ridiculously high charges for withdrawing cash, or other, hidden fees. Another apparently enticing feature is a low monthly minimum repayment (MMR). This is not a financially healthy choice as the MMR can be less than the interest due on the card, so your debt will continue to mount up – even if you spend no further money on your card! Don’t get a credit card with an MMR of less than 2.5%. The mounting debt will only benefit the card provider – not you in any way. If ever there’s a possibility that you might have to pay the MMR, because of your difficult financial circumstances, then choose a card with an MMR of 4% or 5% - the highest you can get. In a survey carried out in summer 2006, the following were some of the more popular card providers with cards having an MMR of only 2%:The AA, Barclaycard, Cahoot, Co-operative Bank, Egg, Goldfish, Halifax, Lloyds TSB, Marbles, Morgan Stanley and Smile.

• Common Credit Card Mistakes
  With credit cards now outnumbering people in the UK you would be right to assume that not everyone in this country uses their credit cards either correctly or wisely. But what are the most common mistakes that credit card holders make when using their credit cards?

In the circumstances that you have a weak credit rating and an outstanding credit card balance, you would be sensible to apply for a 0% balance transfer card. These make interest-free credit easy. If you can’t pay your credit card bill off in full, then a transfer to a 0% balance transfer card is a good way to bring your outstanding bill down to zero. These first came into being over six years ago, and have changed a lot since then. It is important to know what you getting into, how much the transfer fee is, how long the zero percent interest lasts, and critically, to avoid making any other purchases on the new card, because they will NOT be at zero percent.

• Quick Balance Transfer Guide
  Balance transfers allow card holders to transfer the money they owe to their existing credit card to another, usually at a special rate of interest. The new credit card company pays off the old credit card debt and transfers it to the new card. This article will tell you how to play the game.

Another way that card companies make money is to get you to take out payment protection insurance. It is a waste on money – avoid it. It can increase the cost of your credit card spending by about 9.15% each year – and that’s even if you pay off your credit card bill in full every month. This insurance is supposed to meet your monthly repayments if you have an accident or are sick, or unemployed and cannot work. It would also pay off your balance if you were to die. Sadly, the true cost of providing this insurance is only around 3% of your bill – not 9.15%. Avoid this type of insurance.

• Payment Protection Cover For Your Credit Card - Is It Worth The Cost?
  Payment protection cover states quite clearly what it is but what are the ins and outs of the policy and is it worth considering taking out payment protection cover on your credit card.

Just possessing a decent credit card that will not rip you off is not the full answer of course. It is up to you to control your spending. In this debt-ridden society that Britain has become that is difficult. Ultimately people have to be responsible for their own actions – and their own spending.

Tom Smith
11th June 2007