Common questions

Transferring your balance

Applying for a credit card

How many credit cards should I have?

Managing your credit card

Types of credit card

What’s the catch with low interest balance transfer offers?

Low interest balance transfer cards can save you money on interest payments; you just need to consider all the features of the card. Some cards now charge a balance transfer fee. Also, be aware that the low interest rate charged for balance transfers may not apply to purchases. So, if you start spending with your card, you could end up paying a higher interest rate. Because uSwitch makes you aware of any extra charges, you can be sure you’re getting a balanced view.

Should I consolidate my credit card debt?

If you’ve got several credit card debts, it makes much more sense to transfer your balance onto one low interest card. Interest rates tend to be lower on balance transfers, so you’ll be saving money and making repayments easier to manage. Make sure you cut up your old cards once you transfer your balance.

Is it possible to swap my balance from one 0% card to another, to avoid paying interest?

It’s possible but not advisable. Banks are losing money on 0% introductory offers. So they’ve started to include ‘hidden’ charges in their deals. You could end up paying a balance transfer fee each time you change cards. Also, it’s worth bearing in mind that the 0% rate may not apply to purchases. You could end up paying the card’s typical rate anyway.

Plus, applying for new cards in a short period of time can damage your credit rating. Transferring your balance to a fixed low interest rate is a better option to save money.

What’s a good first credit card?

If you plan on paying off your balance every month, then you don’t need to worry about finding a card with a low interest rate. Look out for a card offering a great cashback rate or a loyalty scheme instead.

If you want a credit card for big purchases, such as a new washing machine or life’s luxuries, then you’ll need a card with a low interest rate on purchases.

How do I get the best credit card deal?

Simply by being honest about your needs and your ability to make repayments. uSwitch.com needs this information in order to find the best card to suit your needs. The interest you will be charged each month is calculated from the answers you give. If you underestimate your spending or over estimate the amount you will pay back, your true interest payments will be different.

What sort of tricks should I look out for when looking for a credit card offer?

0% interest rates can seem very attractive but make sure you know what you’re getting into. The rate may only apply to balance transfers, not purchases. So you could end up paying the provider’s typical rate or higher, if you make any new purchases.

You can also end up paying charges if you use your card to make cash withdrawals. You’ll be charged a standard fee, however much you withdraw. Plus, you’ll start paying interest from the moment you draw your cash out.

What should I check before applying?

• What’s the period of free credit (the maximum is 56 days)?
• When is interest charged – from the statement date or the purchase date?
• Will you be charged if you miss a monthly repayment?
• Is there an annual charge?

It’s advisable to limit your credit cards to just two – one for balance transfers, and one for purchases. This is because the rate often differs according to what you’re using the card for.

It’s generally not a good idea to have more than two cards – you may damage your credit rating if you have lots of credit cards. Also, it’s much easier to build up debt and much harder to keep track of repayments if you have lots of different credit cards.

What’s the minimum balance you must pay on a credit card?

Every month you must make a minimum repayment towards your debt. Typically, this is around 3% of your balance (which will include interest), or a £5 charge – whichever is the greater amount. If your provider charges an annual fee, this will also be added to your minimum monthly repayment.

If I pay off my full balance every month, will I ever be charged interest or other fees?

As long as you pay back the amount you owe before the interest rate kicks in (this varies from card to card), you won’t be charged interest. However, if your provider charges an annual fee, you’ll need to include this in your monthly repayment.

If I don’t pay off my balance in full, how much will it cost me in interest?

If you don’t pay off your balance every month, the remaining amount will be added to your next statement. Interest charges will be backdated to when you made the purchase, so you’ll actually be paying two lots of interest on your remaining balance; for the month you made the purchase and the month you carry your balance over.

What happens when my credit card payment is late?

If you don’t make the monthly repayment by the date specified on your statement, your provider may charge you a late payment fee. They might even stop your card.

How do cash advances from a credit card work?

You can use your credit card to withdraw money from a cash machine – this is called a ‘cash advance’. Before withdrawing money, check the amount your provider charges for this service – there’s usually a fixed charge and you’ll start paying interest on this from the day you withdrew the cash.

What are the advantages of owning a platinum credit card?

Platinum cards often offer extra features, such as a low Annual Percentage Rate (APR), and rewards. However, to qualify you need to have good credit and often there is a minimum salary requirement.

What is an ‘affinity’ card?

It’s a credit card which is affiliated with a charity, football club, or political party. The credit card provider will agree to pay a fixed amount to the affiliated organisation every time you spend.

What’s the difference between a store card and a credit card?

Store cards and credit cards work in a very similar way; both are a form of borrowing. The provider adds a monthly interest charge to the amount you borrowed. The amount of interest you’ll pay is based on the provider’s APR and the amount you’ve borrowed. The most important differences between the two types of card are that store cards charge a much higher APR and can usually only be used in just one store or brand.