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UK Credit Cards -- Which One Is Right For You?
Whether you're shopping for UK credit cards for the first time, or just want to add to your existing collection, the options can be mind-boggling. UK credit card companies are among the most competitive globally. With so many choices, it's challenging to find the right one. Before you apply, take time to analyse your needs.
Cash-back UK credit cards reward you with as much as 5% cash-back on purchases, including groceries and petrol. You can get a monthly cash-back check directly from the credit card company, or apply the cash to your balance. You'll need excellent credit for the best cash-back deals, and many require that you pay your balance in full every month.
Travel cards benefit frequent fliers with sky-miles and discounts on accommodation and rental cars. Many cash-back and travel cards offer promotional bonus cash-back and airline miles to attract new cardholders.
Balance transfer cards with low or 0% promotional interest rates are great for consolidating credit debt, and for saving on high-interest balances.
First-time cards for college student feature benefits like rewards for bookstore, record store, and video rental purchases. Some offer additional rewards for paying on time, not going over the limit, and maintaining a good GPA.
With adverse credit, you'll generally pay high interest. A secured card is the best option because the fees are usually less than those charged for unsecured cards. Secured cards are available to anyone willing to deposit an amount with the credit card company as collateral against the credit balance.
Your credit limit will equal the amount of your deposit. If you're scrupulous about repayment, you can use the secured card to rebuild your credit score, and then apply for an unsecured low-interest card. When you close a secured account, assuming the balance has been paid, you'll get your deposit back.
Even with exceptionally bad credit, you can get a card if a homeowner is willing to guarantee your balance, and you don't mind paying interest as high as 40%. A better option might be a prepaid debit card, if you have the money to prepay it.
Unsecured cards for adverse credit are a choice of last resort. These cards typically charge high fees for processing, in addition to an annual fee. When you receive your first bill, the fees may already equal your credit limit. But if the fees are paid promptly, and the account is handled responsibly, the card can be an effective credit-building tool.
Before applying for any credit card, be sure to read the terms and conditions carefully to avoid getting in over your head. The more completely you understand your new card, the more you'll enjoy it, and the more you'll benefit from having it.