Bad Credit History? Apply for Credit Card

Bad Credit Quick links:

Capital One Classic Card - Apply even with poor credit history

Vanquis Abacus Card - Apply even with CCJ's

Not only in UK, but across the globe lots of people at some point in their lives struggle with their bills and can miss payments, whether it be on loans, credit cards, utility bills -you name it! The problem is that when this happens, sometimes through no fault of your own, you end up with a poor credit record. Maybe you even have a County Court Judgement (CCJ) against you. This can often mean that getting credit is difficult, be it a credit card or a loan or even signing up for a mobile phone or book club.
So is there anything you can do? Fortunately yes - and here are the steps to follow:

1. Pay your bills on time

It is often easy to miss payments on loans or cards but if you simply make the monthly minimum payment this will ensure your credit record is without blemish. Whenever you apply for any form of credit this payment history is examined by the finance provider and any missed payments will count against you. Easy? yes but what if you have already missed lots of payments and your credit record is already poor?

2. Assess your situation

If your looking to take out a finance product make sure you can afford the repayments. The reason banks look at your past history is that they do not want to lend money to people who do not pay them back - irregular payments make a bad risk. So why not check your credit record? Banks, like everyone else make mistakes, so its well worth checking your credit record to make sure any information held is accurate. It could be that the bad history is from a spouse or relative who you no longer have a financial connection with or they have simply got their details wrong.

You can get a free30 day trial of the credit expert monitoring service provided by Experian. This lets you access and keeps you updated of all the information on your credit file - the same credit file that lenders and other institutions use to evaluate your credit applications. Its provided in a simple easy to read format and allows you to make sure that decisions are made by correct information about you.

If you don't want to check your credit report online I suggest you contact Equifax or Experian - these are the two main credit scoring bureaux. It costs £2 to get a copy of your record and this will list all the credit information banks use to evaluate credit applications. You should write with your details and a cheque or postal order for £2 to Equifax, Experian or both of the following:

Equifax Credit File Advice Centre PO Box 1140 Bradford BD1 5US Tel: 08705 143700 or Experian Ltd Consumer Help Service PO Box 8000 NOTTINGHAM NG1 5GX Tel: 0870 241 6212 Once you have this information you should know whether you have good or bad credit history. If its good then you should have few problems. If it's really that bad, then read on... Continue to Part II

Link to previous articles: MasterCard v/s or Visa Card Lloyds TSB Platinum Card Cahoot Credit Card Halifax Credit Card Post Office Credit Card Goldfish Credit Card

MBNA Classic Credit Card

Apply for the MBNA Classic MasterCard today and you could save money by transferring the balance from your existing credit cards, store cards and loans. Simply complete the quick and easy online application.

• An outstanding introductory balance transfer rate of just 1.9% p.a. - available for nine months from the date your account is opened. 3% handling fee applies.

• Typical rate 17.9% APR (variable).

• No annual fee to pay.

• There is no liability or excess to pay for theft, loss or fraudulent Internet use - as long as you tell us as soon as your card cannot be found or you notice any unusual transactions on your account.

• Online Banking – Access your account to view your PIN, check your balance and transactions, set up direct debits, carry out balance transfers and much more.

FEATURES:	SUMMARY:
Typical APR:	Typical rate 17.9% APR (variable)(1.3852% monthly).
Promotional rate:	1.9% p.a. on balance transfers and credit card cheques for nine months from account opening (0.1610% monthly), provided you operate your account within the terms and conditions.
Other rates:	17.9% p.a. (variable) on card purchases, balance transfers and credit card cheques (1.3852% monthly), and 27.9% p.a. (variable) on cash transactions (including money transfers) (2.0751% monthly).
Interest free period:	Up to 56 days on card purchases only, if you pay your statement balance in full and on time every month, otherwise interest will be charged as set out below.
Interest charging information:	Card purchases, balance transfers, credit card cheques and cash transactions (including money transfers): we will charge interest on all transactions, fees, other charges and interest, starting on the transaction date and ending on the date you pay the bill in full. We work out interest each day so the earlier you make payment, the less interest you will have to pay.
Allocation of payments:	We will use your payments to reduce balances at lower rates of interest before balances at higher rates of interest. Where you have two promotional rates which are the same, we will use your payments to reduce the balance with the longer promotional period first.
Monthly minimum payment:	If the balance shown on your statement is £25 or less, it will be the total amount of the statement balance; or if the balance shown on your statement is more than £25, it will be whichever is the least of 3% of the statement balance or the total of any Payment Protection Cover charges, interest, handling fees and default charges plus £5, provided that it will always be at least £25.
Credit limit:	We will choose your credit limit and tell you what it is. We may vary it at any time and write to let you know. The maximum credit limit that you can have under this agreement is £50,000.
Annual fee:	£0
Other charges:	3% handling fee (min.£3) on: credit card cheques and balance transfers. 3% handling fee (min.£3) on: cash transactions (including money transfers). 2.75% commission on foreign currency transactions.
Default charges:	£12 for going overlimit, making late payments and for returned payments.

Link to previous article : MBNA Platinum Credit Card

Natwest Credit Card Protection

Nothing is more important to us than your security. We promise to do everything in our power to keep you and your money safe - both online and on the high street.

We offer the following additional monitoring and security services at no extra cost:

Identity theft help line

If you suspect you are a victim of identity theft or would like to know how to protect yourself, our advice line can guide you through the best course of action

Fraud warnings

When we suspect a fraudulent transaction on your Credit Card we will call you in person to check everything's okay. You can also sign up for our free text alerts so we send details of any suspicious transactions straight to your mobile phone.

NatWest Secure - Internet Fraud Protection

NatWest Secure enables you to create a password for using your Credit Card with many participating online shops. You will then be prompted to enter random characters from your password when you shop to make sure you are the genuine cardholder.
Internet Fraud Protection guarantees to refund losses caused by online fraud, so shopping online with your NatWest Credit Card is as safe as shopping on the high street
For your further peace of mind, we also offer the following optional insurance:

NatWest Card Protection Plus

Protect all of your credit and debit cards from fraud if your cards are lost or stolen with NatWest Card Protection Plus. Just one phone call from anywhere in the world will cancel all your cards and order replacements. And if you move home, your bank card providers will be notified of your change of address, saving you time and hassle.
For £29 for 1 year and £70 for 3 years, all your locks and keys are also covered should you need these replaced. NatWest Card Protection Plus covers you and up to 4 people in your household, so everyone can take advantage of the policy.
You can select Card Protection Plus when you apply for your card online.

Payment Protection

Independent financial product research company, Defaqto, has rated our Cardholder Payment Protection Insurance product five stars for its features and benefits.
Protect your repayments against involuntary unemployment, accidents and illness, for just 79p for each £100, or part thereof, of the highest balance on your statement that month.
While you can't work, Payment Protection pays up to 10% of your outstanding balance per month, for up to a year, direct to your NatWest Credit Card.
You need to have been in paid employment for at least 16 hours a week for the last six months.
You can select Payment Protection when you apply for your card online.

PrivacyGuard®

Effective protection from identity theft, with regular credit reports and payment history, fraud alerts and up to £10,000 for legal fees and other expenses to help defend your name and reinstate your credit status. Cover costs just £6.99 a month.

Link to previous article: Natwest Platinum Credit Card

Important tips for cardholders for safe online gambling- II

It is the gambling operator’s responsibility to prevent under-age gambling. However you can help by making sure you know what the rules are.

• It is illegal for anyone under the age of 18 to gamble in the UK.

• Where a minor can get access to your cards, either as an agreed secondary cardholder or possibly without your knowledge, make sure you follow basic security measures – keep your PIN or online password safe and never pass these on and always check your statement so that you always know what is being spent on your account.

• Immediately notify the gambling operator if you think that your child has registered themselves so that the gambling account can be locked.

• To protect your family, consider installing software to restrict access to gambling websites. For example:

www.netnanny.com,

www.gamblock.com,

www.icra.org/parents,

www.cyberpatrol.com

www.getnetwise.org.

• For general help on the internet and children, Childnet International’s mission is to “help make the internet a great and safe place for children” and they can be found at www.childnet-int.org.

The majority of people who gamble in the UK do not encounter any difficulties.
However, a minority may find themselves addicted and need support. The following organisations can provide further advice:

GamCare:

www.gamcare.org.uk

Gamblers Anonymous:

www.gamblersanonymous.org.uk

Gordon House Association:

www.gordonhouse.org.uk


If you do find yourself struggling with debts from online gambling, you should seek advice as soon as possible. The following sites provide support and assistance.

Citizens Advice:

www.citizensadvice.org.uk

National Debtline:

www.nationaldebtline.co.uk

Consumer Credit Counselling Service:

www.cccs.co.uk

Community Legal Service Direct:

www.clsdirect.org.uk

Choosing and Using:

www.choosingandusing.com

Previous Article: Safe online gambling with Credit Cards

Safe online gambling with Credit Cards

Online gambling is becoming more and more popular, and while it is up to you how you spend your money, we should all take certain steps to safeguard our cards when using the internet. This guide aims to provide simple tips to UK cardholders for safe online gambling.

Using our credit cards for online or telephone betting is legal in this country, but there are significant variations internationally. In addition, there have been recent legislative changes abroad that will affect those who choose to gamble online. It is your responsibility to ensure that whatever you are doing is legal.

Here we outline some of the key considerations you should make when gambling online.

Important tips for cardholders for safe online gambling

• Check that your credit card issuer will allow you to use your card to gamble online.

• Check the website is secure before sending your card details. Ensure that the security icon – the locked padlock or unbroken key symbol – is showing in the bottom of your browser window. The beginning of the gambling operator’s internet address will change from “http” to “https” when a deposit is made to your gambling account using a secure connection.

• Look for gambling sites that are accredited by one of the main gambling associations and those which follow a code of conduct for responsible gambling. For more details, see the links overleaf.

• Always check your statements as soon as you receive them. If you find a transaction on your statement that you did not make, contact your bank or card company immediately. Tear up, or preferably shred, any documents that you no longer need that contain information relating to your financial affairs.

• Check whether you will be charged a fee. Some card companies will levy a small charge on gambling transactions and interest rates on any borrowings for bets or gaming may be higher than normal. This information will be clear in your terms and conditions.

Previous Article: Transactions in foreign currencies

Transactions in foreign currencies

When using a credit card to pay for goods or services it is likely you will be charged a foreign exchange fee which covers the charges for converting the currency and the costs of providing customers with access to a global service. Charges on foreign credit card transactions are always a percentage of the transaction value. Credit card exchange rates (which are based on the current wholesale exchange rates) are generally better than the tourist rate.

Check your statement, or with your card company for information on these rates. In addition to these charges if you withdraw cash using your credit card you may be charged a cash advance fee, as well as a fee for using a foreign cash machine. As at home, if you withdraw cash at a cash machine with your credit card you will be paying interest from the date of the withdrawal.

• Increasingly you will find you can pay by debit card abroad and you should be able to do so wherever you see the logo that appears on your card (e.g. Maestro or Visa). Although the currency conversion may well be at the same rate as you would get on your credit card, instead of paying a percentage of the transaction value you will be charged a flat rate for all transactions. You can check this rate in your terms and conditions or by contacting your bank. As with a credit card there may be additional charges if you use a cash machine and any fees for using a foreign cash machine can be checked in your bank’s terms and conditions.

• When paying on plastic abroad the retailer may offer you a choice either to pay in the local currency or have the transaction converted into your home currency there and then. If you decide to do this you should check the exchange rate being used by the retailer because it may not be as competitive as the rate offered by your card company. The shop should make you aware of this optional service – called “Dynamic Currency Conversion” – and if you choose to pay in sterling, the shop assistant should let you know the exchange rate they will use, including any commission charged.

• When using your credit or debit card abroad to make purchases or obtain cash in a foreign currency you will usually be charged a fee. Rates vary between different cards and it is worth checking which

Previous Article: Tips to avoid credit card fraudsters

Tips to avoid credit card fraudsters

We all know that losing your cards, or having them stolen, is a huge inconvenience. It is even more inconvenient when you’re on holiday. By following some simple advice you can help protect yourself against card theft abroad:

1. Only take cards away with you that you intend to use on holiday. Leave others in a secure place at home.

2. Be aware that your card and card details are as valuable to the fraudster as cash. When paying be wary of letting your card out of your sight and carefully dispose of any receipts or statements that include your card details.

3. Check your statement carefully for unfamiliar transactions when you return home.

4. You should consider letting your bank know in advance if you are going to be using your cards abroad. If your bank spots unusual spending patterns it may try to contact you to check that the transactions are genuine.

5. If you drive on holiday, keep handbags and wallets out of sight of opportunist thieves – especially in slow moving traffic. Always remove plastic cards and other valuables from parked cars.

6. In hot weather, wearing fewer clothes can mean personal items such as wallets are more visible. Take extra care to ensure that valuables are safe. A concealed money belt is an ideal way to carry your cards and valuables. If you’re staying in the UK this summer, here are some tips to stop the card criminals going on a shopping spree abroad with your cards.

• Guard your card and card details at all times. Safeguard your PIN. Don’t give it to anyone – even if they claim to be from the police or your bank.

• When entering your PIN at a cash machine or PIN pad in a restaurant or shop, use your hand or body to shield it from prying eyes. If the PIN pad is on a flexible cord, pick it up and hold it so that you can’t be overlooked.

• Memorise your PIN and never write it down – you can change your PIN at most UK cash machines to something you can easily remember.

Previous Article: Tips for safe Credit Card usage on holidays

Tips for safe usage on holidays

Know your PIN

We are now used to seeing chip and PIN terminals in shops, restaurants and hotels in the UK and, with the global rollout now well underway, it is increasingly likely you will be asked to give a PIN abroad. It’s worth knowing that just because you see a PIN pad it doesn’t mean that you will be asked for your PIN –some countries are still using older versions of the technology and in these cases the retailer may be prompted by their pin pad to automatically ask you for your signature.

Remember that if you are asked to give a PIN the process is exactly the same as at home and all you need to remember is your four-digit number to make a payment.

You should also know that, just as at home, if you are asked to give a PIN and you can’t remember it, the transaction is likely to be declined, so it is essential that you memorise your PIN before your travel. Of course, if you think you’ll have difficulty remembering your PIN, why not change it to a number of your choice using the PIN services option at most UK cash machines?

If you know of someone from abroad who is coming to the UK for a holiday this summer, and they do not have chip and PIN in place at home, do let them know that they will still be able to pay for goods and services in the same way as they do at home. They can still sign when using non-chip and PIN cards issued by an overseas bank - the terminal will read the card and instruct the retailer to ask them for their signature rather than a PIN.

Remember you are protected

One of the most enjoyable aspects for many when on holiday is snapping up that holiday bargain we hadn’t expected to stumble across. The good news for the travelers amongst us is that we are now protected on all international purchases made on UK-issued credit cards of between £100 and £30,000. This means that credit card companies are responsible along with the supplier of the goods or services for any breach of contract or misrepresentation by the supplier. This is useful protection if there is a problem with your purchase that you cannot resolve with the supplier.

Remember though - you only get this particular protection if you pay using your credit card. You do not have the same protection if you pay by debit card, charge card, traveller’s cheque, or cash.

Keep phone numbers handy

For those cards you do take with you, make sure you have the 24 hour phone numbers for canceling your cards in case they are lost or stolen – and don’t keep these numbers in your wallet; keep them in a separate place away from your cards. If you forget to take these numbers, but have access to the Internet, a list of contact numbers is available from www.cardwatch.org.uk.

If you know that your card has been stolen or is being used fraudulently contact your bank to cancel your card(s) immediately. Your bank will be able to advise you on how to access your money for the remainder of your trip. You may find that they will be able to organise a replacement card and send it to where you are staying.

Previous Article: Dealing with Credit card Debt: Where to get help

Dealing with debt: where to get help

Being a student is becoming more and more financially demanding. Don’t ignore debt problems; if you are unable to meet your monthly repayments, and you are finding it difficult to pay off the outstanding balance on your credit card, you should contact your card company immediately. The earlier you speak to someone the easier it will be for them to help you with your situation – they will also assist you in developing a plan to manage your debt.

Trying to avoid the problem will only make it worse.

Banks and lenders are sympathetic towards debt and urge customers to address problems straight away. The sooner you seek help the better.

It is also important to be aware of the various support bodies that you can turn to for debt advice:

Choosing and Using	www.choosingandusing.com	Helps consumers make sensible decisions when choosing and using a credit card. The site now contains downloadable guides on choosing and using credit cards
Citizens Advice	020 7833 2181 www.citizensadvice.org.uk	Helps people solve their legal, money and other problems with free information and advice from over 3,200 locations.
National Debtline	0808 808 4000 www.nationaldebtline.co.uk	Provides free, confidential and independent debt advice.
Consumer Credit Counselling Service	0800 138 1111 www.cccs.co.uk	Provides free debt management assistance, budget counselling and educational programmes.
Community Legal Service Direct	0845 345 4345 www.clsdirect.org.uk	Provides free legal advice on debt related issues.

Previous Article: Tips for safe online card usage: beat the fraudsters

Tips for safe online card usage: beat the fraudsters

More and more people are using their card online to pay for goods and services. Using your credit card in these instances gives you extra protection in case things go wrong – protection you don’t get paying by debit card, charge card, cheque or cash.

Take the following steps to protect yourself from all types of card fraud and to bank online with confidence:

1. Surf safe.
You should only ever use a PC with a firewall and up-to-date anti-virus software. If you’re buying online only ever shop at secure websites.

2. Say no to strangers.
Don’t give your PIN or bank passwords to cold callers or e-mails. Always check who you are dealing with. Are they who they say they are?

3. Keep it secret, keep it safe.
Keep your cards safe and never give out your PIN to anyone. Never write down your PIN.

4. Check your statements.
If you spot anything you weren’t expecting contact your bank, building society or card company immediately.

5. Dispose of personal information safely.
Tear up or shred statements or documents containing personal information before throwing them away.

If you discover you have been a victim of card fraud tell your card company immediately and it will be cancelled straight away. It is also recommended that you report the theft to the police.

It can be inconvenient and time consuming but it will make it easier to get your money back.
If the worst does happen then protection provided by the card companies means that you can usually get your money back. If a criminal uses your card before you tell your credit card company that it has been lost or stolen, or if someone else knows your PIN, the most you will ever have to pay is £50.

For more information about how to shop and bank safely online, visit the following sites:

www.cardwatch.org.uk

www.banksafeonline.org.uk

www.getsafeonline.org

www.identitytheft.org.uk

Previous Article: Tips for safe borrowing and using credit card

Tips for safe borrowing and using credit card

It’s important that once you have found the right card you use it responsibly. Living away from home gives you more freedom than ever before but the reality of rent, utilities, food and bills means you will have to budget to ensure you don’t run into problem debt. Below is a list of top tips to help keep your finances healthy and give you peace of mind:

1. Budget before you borrow. You should work out a budget and stick to it. When making purchases shop around for the best deal. Ask yourself if you can afford the repayments before you make a purchase. Do NOT use your credit card to buy goods you can't afford or to fund a lifestyle that is beyond your means.

2. Consider setting up direct debits. If you make monthly payments on any credit cards you can ensure that you never incur any late payment fees. Talk to your card issuer to find out how. It may pay to set up direct debits on other regular bills as many companies will give you discounts.

3. Beware of only making minimum repayments on credit cards. Unless you’re taking advantage of a special deal or a zero per cent offer, only ever paying the minimum repayment will cost you more and increase the time taken to clear your debt. It is NOT a suggested payment schedule.

4. Check all your monthly statements. Managing your money means knowing what you are spending and, on a credit card, what you owe. How much interest are you paying? What repayments must you make? The answers are all on your monthly statement.

5. Keep your details up to date. If you’ve moved out of home to start university you will need to notify your bank and any credit card companies of your change of address so that you can continue to receive your monthly statements. Alternatively, you may be able to access your accounts online allowing you to check your finances regularly.

6. Keep your PIN safe. Never ever write your PIN down or tell it to others, not even your friends. If you have difficulty remembering your PIN then you can always change it to a more memorable number at most cash machines.

7. Allow time for card payments to reach your account. Debit and credit card payments can take several days or more to reach your account. There will normally be information on your statement that tells you how long you should allow.

8. Be wary when withdrawing cash. Even if you only use your debit card to get cash from cash machines, remember most cash machines operated by banks and building societies let you withdraw money for free. Non-bank cash machines, however, will usually charge a fee. You will always be told if you are going to be charged. Constantly incurring a fee to access your cash will soon mount up and eat into the money you have to spend on yourself. Withdrawing cash on a credit card is more expensive with interest charged from the day you make the withdrawal.

Previous Article: Student Credit Cards - II

-(As advised by FSA)

Student Credit Cards - II

If you decide a credit card is right for you, with so many cards to choose from it is crucial that you think about what you want from a credit card and how you intend to use it. Different cards suit different people’s needs.

The following list of top questions provides a guide to for a student for some of the things you should think about before deciding on a credit card.

1. Do I need a credit card? Can I afford it?

2. What do I want the credit card for?

Is it just to pay for things and not for credit at all? And, do you intend to pay off your balance in full every month? Credit cards can be very effective in helping you spread the cost of spending over a number of months – this may prove particularly useful during the first few months of university when you have heavy set up costs to deal with. You may also consider a credit card as a standby option in the case of an emergency.

3. What card features are important to me?

Check things like the interest rates — for purchases, balance transfers, cash advances and credit card cheques; the length of the interest free period for purchases; incentives and benefits such as cashback, rewards or loyalty points; being able to manage your account online; using your credit card when you are abroad.

Once you know what kind of credit card you want and how you intend to use it:

4. Make a shortlist.

When you know what you are looking for, talk to card companies, look online, look at the Summary Box for each credit card and make a ‘top five’ list of credit cards that are right for you.

5. Compare cards.

Get a copy of the Summary Box for the cards on your shortlist. Have a look at all the different features and decide which card is most suited to your needs.

6. Review the terms and conditions.

Make sure you have read, in full, the terms & conditions of the credit card that you decide to apply for. This is important to ensure that you fully understand your responsibilities and obligations.

7. Apply for a card.

You can apply for your card in person, on the phone, by post or online. Remember, you need to be completely truthful in your application. As part of the application you will sign to indicate your acceptance of the terms and conditions.

8. The card company’s decision.

Your card company will run some credit checks on you and look at your application form and any
past payment behaviour before deciding if you are eligible for a credit card. If more than one interest rate is available for a credit card, the card company will decide which rate and credit limit are appropriate, depending on what they think you can afford to pay back.

9. Receiving your card.

Some issuers may require you to activate your card before you can begin using it. If on receipt of your card
you decide that the credit is not for you then you should immediately contact the card company and ask to cancel the agreement.

10. Tidy up loose ends.

If you’re transferring a balance from another credit card or closing an old account remember to check that any regular or recurring payments have been cancelled or moved from your old credit card.

Previous Article: Student Credit Cards - I

Student Credit Cards - I

Introduction

So, you’ve accepted your offer and you’re off to university! Your student days promise a busy social life, the chance to develop new interests and, of course, the opportunity to study your chosen subject. You’ll be given a lot of independence – perhaps moving out of the family home for the first time – and deciding how you want to live your life. You’ll also be responsible for managing your finances.

Looking after your money is a big responsibility, and for some students it can be a constant burden. While there’s no avoiding university fees and the cost of living, by learning to manage your money you are giving yourself the best chance of graduating with both your career and your bank balance in order.

Before you rush into any decisions, it pays to be aware of the financial options available to you.

Here we outline some of the key considerations students should make when making financial decisions, particularly about choosing and using plastic cards.


Used sensibly, credit cards offer many benefits, but used

Benefits
• Free, short-term credit as long as you always pay your balance in full by the due date shown on your statement

• A safe and convenient way to pay for goods and services, particularly over the internet, by telephone or by mail order

• Protection against fraud — if you are the innocent victim of fraud you will not be expected to pay if a criminal uses your card

• Incentives for using a card such as loyalty points and cash-back, or payments to support a charity

• Convenience when travelling, as credit cards are accepted in virtually every country around the world

• Perhaps the most flexible and convenient way of borrowing money in the short term

Risks

• Can lead to unplanned levels of debt

• Can incur charges if you make late payments, miss them altogether or go over your credit limit

• Can damage your credit rating if you continually make late payments or miss them altogether

• Can cost you more and take you longer to pay off than the alternatives, particularly if you only ever make the minimum repayment

• Can make it difficult to manage your finances if you have more cards than you need

Choosing the financial products that suit you:
During the first few weeks of university it is likely that you will receive offers from local banks and building societies to set up an account, take out a loan or apply for a credit card.

Often these offers are accompanied by free gifts or incentives such as iPods, MP3 players or discounted travel cards; some more valuable than others. If you decide to open an account, it is important to choose the right one.

Studying the terms and conditions and key features, such as overdraft limits and credit interest, may be time consuming but it’s important if you want to get the best from your bank.

For those considering the option of a credit card, think about what you need it for: is it a luxury or a necessity?

A credit card is a convenient short-term way to borrow money, usually offering a period of interest free credit. But if you’re thinking about borrowing money for more than a few months then you might want to consider a personal loan.

Remember, you have to pay back what you borrow. The golden rule is, if you can’t afford to pay it back, don’t spend it!

Previous Article: History of Credit Cards (Plastic Cards)

Understand your credit card

Card design

Whilst the industry sets technical standards – like flexibility, flammability, toxicity (some people are allergic to some plastics) - the actual design is up to your card issuer. It can be as straightforward or unusual as they like

Chip

As can be seen in the figure above, the chip is actually a Golden coloured electronic chip on the left side of the card under the name Goldfish, and this is what is used in the so-called chip-n-pin. The chip or microchip, embedded into a debit or credit card, provides highly secure processing capabilities to carry out the card transaction, and that includes verifying that the correct PIN has been used. In addition to holding the same personal data as that on the magnetic stripe (i.e. cardholder name, card number and expiry date), the chip provides additional security features to safeguard against counterfeiting. The four digits of your PIN (personal identification number) are not held as a set of numbers on the chip.

Card scheme logo

As can be seen in the card design above, the logo may be wither of Mastercard, Visa, Visa Electron, Switch, Solo, Amex, Discover, etc.
This tells you which card scheme will be responsible for clearing payments and, where the symbol is displayed, which retailers will accept your card.

Hologram

The flashy silver colour hologram just under the Scheme logo.
An additional security feature to identify that the card is genuine

Expiry date

Along with the card number the card’s expiry date is essential to process a card payment.

Your name

The cardholder’s name is displayed at the bottom of the card.

Card number

Generally 16 digits but can be up to 19 – this identifies your account, with the first six digits comprising what is known as the BIN (Bank Identification Number) and this identifies your card issuer and the card scheme.

Previous Article: Different kinds of Credit Cards

Card design

Whilst the industry sets technical standards – like flexibility, flammability, toxicity (some people are allergic to some plastics) - the actual design is up to your card issuer. It can be as straightforward or unusual as they like

Chip

As can be seen in the figure above, the chip is actually a Golden coloured electronic chip on the left side of the card under the name Goldfish, and this is what is used in the so-called chip-n-pin. The chip or microchip, embedded into a debit or credit card, provides highly secure processing capabilities to carry out the card transaction, and that includes verifying that the correct PIN has been used. In addition to holding the same personal data as that on the magnetic stripe (i.e. cardholder name, card number and expiry date), the chip provides additional security features to safeguard against counterfeiting. The four digits of your PIN (personal identification number) are not held as a set of numbers on the chip.

Card scheme logo

As can be seen in the card design above, the logo may be wither of Mastercard, Visa, Visa Electron, Switch, Solo, Amex, Discover, etc.
This tells you which card scheme will be responsible for clearing payments and, where the symbol is displayed, which retailers will accept your card.

Hologram

The flashy silver colour hologram just under the Scheme logo.
An additional security feature to identify that the card is genuine

Expiry date

Along with the card number the card’s expiry date is essential to process a card payment.

Your name

The cardholder’s name is displayed at the bottom of the card.

Card number

Generally 16 digits but can be up to 19 – this identifies your account, with the first six digits comprising what is known as the BIN (Bank Identification Number) and this identifies your card issuer and the card scheme.

Previous Article: Different kinds of Credit Cards

Checking your creditcard statement

You should always check your statement thoroughly every month. Take care to review all of the transactions listed against your receipts. Make sure you can account for all the transactions and that they are all for the correct amount

Disputed transactions

If there’s a problem with goods or services you bought you should fi rst try and resolve it with the retailer. If they can’t or won’t help you – perhaps because they have gone bankrupt – you have extra protections in law when you buy on a credit card.

Under Section 75 of the Consumer Credit Act your credit card company has joint responsibility with the retailer for transactions over £100 in cases where there is a breach of contract or a misrepresentation – so you may be able to get your money back from your credit card company.

Mistakes & fraud
If you spot fraud or a mistake on your statement tell your card company immediately. You will still have to pay for any purchases that are not in dispute but your credit card company will usually freeze the transaction you are questioning. They will refund the actual transaction, and any interest automatically applied to your account, if there has been an error or you have been an innocent victim of fraud. These guarantees are provided by The Banking Code.

Paying off your credit card

Your statement will tell you how you can pay off what you owe, for example using cash, cheque, debit card, telephone or internet banking, and what time you should allow to make sure the payment is received by the due date. This can differ between card issuers so it is worth following the advice carefully.

Your credit card company may also let you set up a direct debit. It’s a good way of making sure that you don’t miss a repayment and avoiding any late payment charges.
However you decide to pay remember to plan ahead to make sure your payment reaches your credit card account by the payment due date.

How much is my card costing me?

Your statement can tell you. The three key things that affect how much your card costs you are:
1. How much you borrow
2. Your interest rate – different kinds of transactions may incur a different rate of interest and you should also check to see when your credit card company starts charging you interest
3. How much you repay and how quickly you repay it

Previous Article: Understanding your Credit Card Statement

Protecting your cards from fraud

Unlike elsewhere in the world, any UK cardholder who is the innocent victim of fraud is not held financially liable and the most you will ever have to pay is £50.

However, the inconvenience of reporting an incident, being without your credit card and waiting for any fraudulent activity on your card to be reversed or offset can be very upsetting and frustrating.


Visit the websites for your credit card protection:
www.cardwatch.org.uk
www.banksafeonline.org.uk
www.identitytheft.org.uk


Protect yourself from being a victim of card fraud by:

• keeping your PIN safe
• never letting your card out of sight when making a transaction
• only shopping on secure websites and from a computer that has upto-date virus protection
• carefully discarding any receipts and statements by shredding them or tearing them up
• carefully checking your monthly statement
• reporting lost/stolen cards or any suspicion of fraudulent activity immediately to your credit card company
• shielding your PIN when using your card, both at a cash machine or at in a shop.

How the cardholder is protected? The legal side of protection

Using your credit card to make purchases gives you extra protection if things go wrong – protections you don’t get paying by debit card, charge card, cheque or cash.

When you spend between £100 and £30, 000 on a purchase with your credit card you benefit from Section 75 of the Consumer Credit Act (1974).

This law means that your credit card company is jointly responsible, along with the supplier of the goods or services, for any breach of contract or misrepresentation by the supplier. In practice this means that if a company fails to actually deliver the goods or services you’ve paid for – perhaps because they have gone out of business – you can get your money back from your credit card issuer.

Section 75 does not absolve the supplier who has let you down of their responsibility so in the first instance you should always try to get your money back from them first. Keep a copy of any correspondence as your card company will ask you for this.

Previous Article: Using a Credit Card

Using a credit card

Continuing further from our past article on Credit Card Jargon Buster, let’s today talk about some good tips on how to use your card wisely.

Whether you’ve just received a new credit card or have been using one for years it makes sense to check that you are using your card sensibly. This article has a few top tips to keep your finances healthy and give you peace of mind.

Please understand it clearly that Credit is not free money. If you want to borrow on your credit card check that it is the most effective way to pay for what you have in mind. A credit card can give your finances flexibility but is not the most sensible choice for long-term borrowing.

It’s common sense that if you can't afford to repay it then don't spend it.
When choosing your credit card you should have carefully considered what you want it for and so should be aware of its features and terms and conditions, and how you intend to manage your repayments.


Top 10 tips to get the most from your card

1. Spend only as much as you can afford

If you don’t intend to pay off your statement amount in full every month, and before you use your credit card anymore, ask yourself if you can afford the repayments. Do NOT use your credit card to buy goods you can't afford or don't need, or to fund a lifestyle that is beyond your means.

2. Set up a Direct Debit to pay at least the minimum payment each month

That way you can ensure you never incur any late payment fees. Talk to your card company to find out how to do this.

3. Don’t make the minimum repayment on a long-term basis

Unless you’re taking advantage of a special deal or zero per cent offer only ever making the minimum repayment will take you longer and cost you more to clear your debt. It’s NOT a recommended payment schedule.

4. Ensure payments reach your account on time

Payments can take more than three working days or more to reach your account. There will normally be information on your statement that tells you how long you should allow.

5. Check your monthly statement

Managing your money means knowing what you owe. How much interest are you paying? What repayments must you make? The answers are all on your monthly statement.

6. Keep your PIN safe

Don’t write down your PIN or lend your card and PIN to others. If you do you could be held liable for any fraud on your card.

7. Think about how many cards you really need

If you believe you have more cards or more credit than you can resist or reasonably manage, talk to your credit card company and ask them to reduce your limit. Alternatively, if you no longer want or need a card, cancel it with your credit card company and close the account.

8. Read all correspondence from your credit card company

Your card company will send you important information about changes in your terms and conditions, including increases in your credit limit, special offers including balance transfers, and, potentially, credit card cheques. Reading these updates will help you manage your credit card account responsibly.

9. Keep some savings for unforeseen circumstances

A sudden emergency or loss of employment may mean that you cannot afford to make your repayments. Having savings can help you through such times.

10. NEVER IGNORE DEBT PROBLEMS!
If you are unable to meet your monthly repayments and you are finding it difficult to pay off the outstanding balance on your credit card you should contact your credit card company immediately. The earlier you speak to your card company the easier it will be for them to help you with your situation and assist you to make a repayment plan.


Previous Article: Credit Card Jargon Buster

Problems with Chip and Pin

Problems with Chip and Pin

Though Chip and Pin comes with benefits, but it still is not foolproof and also creates some problems for individual handling. The biggest problem with chip and pin is that you will have to key in your PIN no. at every transaction, be it buying a beer in the pub, shopping at Tesco, Sainsbury or Asda, or withdrawing money from any ATM or cash machine. Since you have to key in your pin every time, it means that you are prone to your pin being revealed to people standing nearby.

For e.g., shopping at stores like Tesco and Asda are very much susceptible to revealing of PIN. There is a long queue of customers behind you. While you key in your pin, it is possible that someone might see your finger movement.

Another problem is that stores usually have cameras installed at the payment counters. They can easily capture your finger movements while you key in your PIN. However, in countries like Netherlands, superstores like Albert Hein have a shielded cover to hide the PIN pad, hence it secures the PIN no. while entry. The same can be followed in UK as well.

The customer is responsible now:
One of the major setbacks of implementation of chip and pin is that the liability is now given to the customer. Imagine someone robs you of your card on a lonely street and beat you to ask your pin no. By the time you file complain, the robber may use your card to withdraw money, make an expense or shop around with your card. The banks issuing the card just finish off with their liability the time they give you your PIN No. It becomes the customers responsibility for all the transactions that have taken place, as he is the only one suppose to know about the PIN.
It also makes it hard for the customer to prove his innocence in case of fraud, as he is the only one suppose to be responsible for the PIN and the card.

Here are some stories of credit card frauds

Here are some stories of credit card frauds:
· Resellers liable for fraudulent transactions (BBC News)
· The story of how French smartcards were cracked back in 1999 (multiple sources)
· Hackers succeed in cracking Siemens digital card signature (The Register)
· Card Confusion (IT Week)
· The Dangers of Identity Fraud (Credit Card Magazine)
· Market Comment (Yahoo Business)

Especially for elderly people, it may sometime become inconvenient and embarrassing if they forget their PIN no. while paying for shopping at a retailer or at a restaurant. They are required to remember the PIN, while initially they were only required to sign on the paper receipt.

-Credit card frauds - Statistics

It has become increasingly important that you shield your credit card or debit card from the fraudsters and use it wisely and carefully. Remember that fraudsters are just looking for opportunities where they can trace out the details of your credit card or debit card, and misuse it. All you end up doing is getting into an unwanted situation of financial obligation that you have not met and getting into legal proceedings. As it is said, “Prevention is better than cure”, so lets be cautious while using our credit card or debit card either online, or in-country retailers and especially while using the cards abroad.

The successful introduction of chip and PIN in the UK has meant that fraudsters are increasingly being driven overseas to commit card fraud on UK cards in countries where chip and PIN has not yet been rolled out. For e.g. US is yet to introduce chip and pin service and is still preparing to fight up against credit card frauds.

Here are some facts and statistics about the Credit card frauds that have been committed on UK based credit and debit cards in last few years. We believe this will give you enough insight into how important it is for anyone to prevent credit card or debit card misuse and protect his cards.
The statistics presented are gathered from various official sources like FSA records and those available online.


In 2006, fraud committed abroad using UK-issued credit and debit cards totalled £118.2 million. Although up 43 per cent from 2005 (£82.8 million) the British public are spending more abroad with their cards than ever before and the losses are still smaller than they were in 2001 and 2002 (£138.4m and £130.2m respectively).

However, you don’t necessarily have to leave the country to be a victim of fraud abroad. You may as well end up revealing your credit card or debit card details to a fraudster while staying in your own country and the fraudster may end up using your card for an online purchase from a foreign country. Some intelligent fraudsters even use card copiers, which replicate your credit card or debit card and create an exact duplicate card resembling your card. They then use the replicated card for purchases and the bills to be paid become your liability.

A proportion of this fraud occurs when your card or card details are stolen in the UK and then used fraudulently overseas. In 2006 the countries where most fraud occurred on UK-issued cards were the US (£16.7 million), France (£7.5 million), Spain (£6.7 million), Italy (£6.4 million) and Thailand (£4.1 million). So you see, the card details can be taken to any country and can be used from anywhere. Losses in the US, which as yet has no plans to rollout chip and PIN, were up 49% year-on-year. However, losses in France and Spain, countries that are rolling out the secure technology, have decreased by 35% and 30% respectively.

Hence, Chip and PIN service seems to be quite effective in fighting card frauds. Countries like Netherlands, have forced chip n pin service compulsorily, so is being implemented in UK as well.

This article was to give you a rough idea of how much prone your credit card is to frauds and hence you should ensure that you keep it at a safe place and don’t reveal the details while shopping or making online purchases.