Thinking of getting a credit card | Credit Guidance | Barclaycard

If you’re unsure about whether or not a credit card is for you, we’ve put together a few of the benefits you can expect, depending on the card you choose. Just make sure you’re aware of all potential costs and only borrow what you can afford to pay back without overstretching yourself.

Used wisely, some credit cards could be great for:

• Transferring credit card balances so you pay no interest
  If you apply for a balance transfer card with an interest-free period, you could get a breather from paying interest. Even with a transfer fee to pay, it may work out cheaper over the course of the interest-free period. You could then use the interest you’ve saved elsewhere or even pay down the amount you owe.
  
  Just bear in mind that if your credit card has a balance transfer offer, you may still be charged interest on purchases you make.

• Protection when you pay for goods
  Credit cards offer greater legal protection than debit and charge cards when you spend £100 or more, even online. So you’re more likely to get your money back if the website, travel agent or retailer you ordered from goes bust.

• Borrowing money without paying interest.
  By paying your balance off every month, you could enjoy up to 56 days of interest-free credit. Keeping a close eye on when payments are due or setting up a Direct Debit to pay off your balance in full will help you make the most of this grace period.
  
  While you get this interest-free period for all new transactions, you’re charged interest from the day make cash withdrawals, balance transfers or write credit card cheques.

• Managing your finances with flexible payments
  Credit cards differ from other types of credit, such as loans, in that you don’t have to pay a fixed amount that’s arranged upfront.
  
  You could choose to pay the minimum, although it takes longer to pay off the balance and you’re charged more interest in the long run. Or you could pay more, up to the full amount of your balance. The choice is yours.

• Keeping track of how much you’re spending
  Since every transaction you’ve made is shown on your statements, it’s easy to monitor exactly how much you’re spending every month. This can be a helpful budgeting tool.

• Emergencies
  How would you cope if your car needed emergency repairs? Or you had to make an unplanned trip due to a family emergency?
  
  Having a credit card could help cushion the cost of life’s ups and downs, without you having to dip into your nest egg. It’s quicker to access funds than taking out a loan and you can pay the balance off in amounts you can afford, as long as they are more than the minimum payment.

Get more advice if you need it

There’s plenty of independent, free advice about credit cards.

The Financial Services Authority (FSA) can tell you all you want to know at www.moneymadeclear.fsa.gov.uk

You can take the FSA debt test or the Financial Healthcheck to see where you are now.

 

APACS

APACS, the UK payments association, offers free and impartial guides to credit cards. You can find them here

Or you can download the guides here –

 

UKCA – Re-pricing guide

The UK Cards Association, UKCA, is a trade body which provides information to all credit card customers as well as developing industry standards and best practices.

It has developed a factsheet which aims to answer customers' questions on credit card re-pricing which you can download here.