Credit cards are the best way to borrow money. There are many credit card companies that offer these cards to the citizens of the UK. However, it could be a bit difficult for people who are new to the UK. The companies would like to check your credit score and record of bill payments. As part of the process, they check the UK address and expect a person to have been living there for at least one year. The companies also hesitate in giving cards to people with no history of borrowing or repayment of debts in the UK.
Rules for the UK credit cards:
Just like in any other country, UK credit cards are a way of borrowing money. The cards are popular than cash loans as they facilitate purchases, travel money and all kinds of monetary transactions. You will have to pay an interest on the amount you borrow unless you make full repayment at the end of the month. If you can’t make a full repayment then at least pay minimum monthly repayment or else you will be charged with extra fees.
Credit report and Credit card scoring in the UK:
If you are new to the UK and want to apply for a credit card then first thing you need to do is check your credit report with any of the three agencies namely, Experian, Equifax and CallCredit.
The credit card companies will check your credit score to decide whether they want to offer you a card or not. Some of the factors on which they offer the card are:
- If you are a registered voter or not
- Any existing cards that are no longer in use
- Number of credit applications in a particular time period
- Switching houses frequently
- Existing and open joint accounts
- Fluctuations in your income
UK credit cards and the deals:
The deals will depend on your usage of credit card. You must keep in mind a few features that may help in managing money through credit cards.
Standard interest rate: When you make purchases through the card then you have to pay interest for the balance money. It is called as Annual Percentage Rate (APR) and the lower the APR the better would be your credit score.
0% interest period: Some of the credit card providers allure customers with this offer. They charge no interest for a fixed period of time, normally 56 days. This is the best time to transfer an existing balance as you won’t be charged any interest for it.
Cashback: Some of the loyalty schemes offer you rewards and cashback offers for your credit card spending. These are also given if you make full repayment before the interest comes into the picture. You can enjoy these rewards through your card and keep borrowing, provided you manage repayments on time.
How to save on UK credit cards?
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