so you want a credit card?

Other kinds of credt cards include:

1. A cheque guarantee card, issued by your bank, that you can use to ensure that your cheque will be honoured up to a certain limit.
2. A charge card where you have to repay the full amount at the end of each month.
3. A debit card, issued by your bank, where whatever you spend is immediately deducted from your bank account

Using a credit card is a useful way of making purchases:

1. A credit card means you don't need to carry huge amounts of cash around and risk losing it.
2. A credit card means you can buy items over the internet.
3. A credit card means you can make purchases abroad without having to worry about local currency.
4. A credit card gives the opportunity to spread the cost of a large payment over several months.
5. A credit card is useful in an emergency, for example, an unexpected repair to your house or car.

How do you choose a credit card?

The main two UK credit card issuers are Visa and Mastercard. These are accepted in most places and in 130 countries worldwide. Beware of less well known brands that may not be accepted everywhere.

Before you choose which credit card is the best for you, remember to read the terms and conditions carefully. Never sign up for a credit card without fully understanding what you are agreeing to.

Remember that all the plus factors will be prominently displayed in large print.

You may have to study the small print carefully to discover if there are any negative factors.

What Credit Card Terms You Need to Consider

APR (Annual Percentage Rate)
This is the rate of interest that you will pay on any outstanding balance.

Special Introductory Rates
You may be offered a low or 0% rate of interest for a limited time (Up to 6 months) when you sign up for a new card. A higher rate of interest may be charged for cash withdrawals.

Balance Transfer Rate
Card issuers may offer you a lower rate of interest if your swap your balance from another credit card to theirs.

Interest Free period
Remember to check when interest payments will begin. Will you pay interest from the day of the purchase? Or will you have a number of days interest free before you begin to pay? There is usually no interest free period for cash withdrawals.

Cashback and Rewards
Some cards over points or rewards for every pound spent on the credit card. Make sure that these are appropriate for you. For example, there's no use collecting airmiles if you never fly.

Minimum Credit Card Repayment
Remember to check what the minimum monthly repayment will be. If you borrow £1000 on your credit card the monthly minimum repayment will probably be in the region of £25. But if you only pay this amount each month it will take a long time to pay off the balance and cost a lot in total when you include the interest payments.

Annual Credit Card Fees
This is the fee that the issuer will charge you every year for using their credit card. Not all credit cards have an annual fee, so remember to consider this when you are choosing which one is right for you.

Late Payments
There will be an extra charge, as well as the interest owed, if your payment is late. This charge may even be more than the amount you owe so be very careful to check what the charge is, and to ensure that all your payments are made on time. A good way of doing this is to set up a direct debit from your current account.

Exceeding Your Credit Limit
You may also be charged a fee if you exceed your credit limit.

Will Your Credit Card Application Be Accepted?

Whether or not your application is successful will depend on your credit rating. Your credit rating depends on your credit history (a record of your use of credit) and is based on the record of your ability to repay debt.

You can obtain a copy of your credit file by contacting a credit reference agency. There may be a small fee for this service.

When your application has been accepted you will be given a credit limit. The credit limit will be fixed when you first apply for your card (although you can ask for it to be increased or decreased later) and the limit, including the amount you have left available to spend, will be shown on your monthly statement.

Credit Card Insurance and Protection.

Take good care of your credit card to ensure that it isn't lost or stolen.

To prevent misuse of your card you must report any loss or theft of your card to the issuer immediately. Many issuers allow you to register all your cards with them so that in the event of you losing a purse, handbag or wallet they can all be cancelled with just one phone call.

You must keep all your receipts and also check your statement carefully and report any suspicious transactions, for example payments that you have no record of making.

Credit card companies are now issuing cards with PIN (Personal identification numbers) which are known as Chip and PIN cards. Rather than signing your name you will be asked to enter your PIN onto a keypad. You must ensure that you keep this number secret.

What The Credit Card Issuer Will Do

1. The issuer should insure you against loss, misuse or theft of your card.
2. The issuer may also insure your purchases for up to 100 days.
3. Your issuer may also provide protection against you being sold unsuitable or shoddy goods.

Important Points To Remember:

1. Credit cards can be a very useful tool to help you to manage your finances.
2. Choose your card carefully, remembering to read and understand all the terms and conditions before you sign up.
3. Remember to set yourself a budget and decide how much you will pay off each month.
4. Check your statements carefully each month.
5. Look after your card to prevent it being lost or stolen.

Currently best Credit Card

Capital One Platinum Card ,0% on balance transfers until 1st March 2009,0% on purchases until 1st March 2009,Easy Balance Transfers,Free indentity theft service register online for free indentity alerts powered by Equifax,all this with currently the lowest APR of 9.9% typical.

So, you want to get a loan?

Here are some simple tips that will help you make an informed decision about what kind to buy, and who to buy from.

A loan varies according to:

• The amount borrowed
• The interest rate
• The type of rate (fixed or variable)
• The term (length in years) of the loan
• Deposit (downpayment)
• Associated fees (broker, origination, prepayment etc.)
• Insurance required by the lender.

 

"You are buying money for more than it cost the lender. Simple".

 

It's a mistake to only care about the interest rate; there are also * arrangement fees * and * prepayment penalty * clauses to consider. This is how brokers and lenders make their money. Work out the total cost of your loan before committing.

Keep a copy of every cheque you write for your loan. If you call your lender about your loan, make sure you get the full name of the person with whom you speak. Make a note of it. You may be dealing with a large bureaucracy, and will need to refer to this conversation later.

Do a budget. Make sure you use realistic figures. Keep all of your receipts, or keep a record, for all of the money that you spend for a month. Use that to help you compile the first draft.

Be prepared to review and update it regularly. A co-ordinated budget allows you to get the most loan for your money without beggaring yourself, while getting rid of wasteful spending.

Avoid 'quicksand' loans. These contain combinations of the following attributes:

• Short-term
• High up-front fees
• High rates
• Balloon payments
• Excessively high late fees
• Prepayment penalties

 

"Quicksand loans can swallow up any equity you may have, and ruin your financial position".

 

Beware of prepayment penalties. Many 'no fee' credit lines have a pre-payment penalty. There is no need to agree get a loan which contains any significant prepayment penalty, if you have good credit. One of the smartest things someone can do with a loan is to prepay it.

All you need to do is contact your lender and ask for its prepayment procedure. Then, every so often, check the loan balance the lender sends you, to make sure the additional payments have been accounted properly.

Be wary of promises of getting a loan quickly. Many borrowers are told that their loans will close within a particular time. They don't make payments on existing debts, in anticipation of the new loan.

After several delays, they become delinquent, with no money from the new loan. Some mortgage companies then order new credit reports, and charge the borrowers higher fees, and a higher rate, because of the delinquent loans, which resulted from delays caused by the loan company!

Submit a neat application form; it shows you're business-like and efficient. It will be read and assessed by a human being; appearances count.

Only pay up-front fees to well-known or highly recommended institutions. While most institutions are reputable, it is always best to be cautious.

Don't sign documents without reading them. As soon as possible, before you close the deal, review the documents you'll be signing, and make sure you understand them, so you won't have to sign them in a hurry.

Keep your credit line as small as possible. You could be turned down for other loans, even when your credit line has a zero balance, since a large credit-line indicates a large potential outgoings.

If your spending is out of control, don't get a home equity credit line to pay off your credit cards. Don't put your home at risk by spending large amounts on your credit cards, after paying them off with your credit line.

Pay off small debts before the due date. Cancel credit cards you are not using. Loan officers tend to count the total line of credit - even if you owe nothing - as a liability. They will only cloud the picture. Close credit lines that you have no intention of using in the near future. Also look closely at the interest rates and fees, when deciding which cards to keep.

Choose a lender with a clean record with the industry watchdogs in your country. The mortgage industry receives a great number of complaints against it. In the UK, credit brokers of any kind must have a licence from the OFT, and if they lose it, the OFT publishes this on their website.

Shop for rates when the market is calm. Rates change from day to day, so compare lenders. The quotes you get should all be from the same time period.

Check your payments are correct - Do the mathematics. There's a one in ten chance you could be paying more than you should.

If you find yourself in a dispute with a lender about a payment or another issue, don't send correspondence to the same address you send your payment. You need to deal with the decision-makers, not the account clerks.

Currently best Personal Loan(unsecured)

Bank of Scotland are currently offering non secured loans,No Admin charge,Typical Apr is currently running at 7.8%(20/05/08),only takes 10 minutes and you could have a decision within the hour(based on £7,500 over 60 months for new customers only),others are Halifax at 8.4%,Egg at 9.9%,Natwest at 10.9% and First Direct at 11.9%