Compare Credit Cards Online UK
How do I compare credit cards?

Comparing different credit cards is a regrettably complicated business. The bewildering array of credit cards promising cheap rates, low fees and 'exclusive' benefits can leave customers in a state of utter confusion. Unfortunately there aren't any shortcuts and in order to compare credit cards effectively you'll need both time and patience. However, it is well-worth having a good look around as credit card packages run the gamut from the financially sublime to the fiscally ridiculous. And remember that while it's easy to borrow it's often much more difficult to repay.

Before looking at cards it is important to make sure that you understand the various terms used by credit card companies. The most important feature of any card is the APR rate (which translates as Annual Percentage Rate in longhand). This means how much extra you have to pay on top of the money you borrow. An APR rate of 14.0% a year means you are paying £14 for every £100 borrowed, and if you don't clear your account in the specified time period it soon adds up. So what's a good APR? Some cards offer APRs as low as 10% and others up to 20%. Clearly this will represent a big difference in payments over time. The APR for cash advances is also much higher than for purchases; so be careful.

While the APR is likely to be the sole most important factor in deciding which credit card best suits your needs, there are some other variables that should also be taken into account. If you've borrowed money on one card and want to change to another (to take advantage of more preferable rates) then you'll need to look hard at Balance Transfer costs. A number of cards offer a low transfer rates (or sometimes no rate at all) for a limited period of time; typically between six and eight months. Others allow this low rate to continue until you have paid off the balance entirely. Cards also offer interest-free payments on purchases for a number of days, which means that you can buy something and (as long as you clear the card pay) no interest at all.

Another way in which credit card companies try to woo new custom is with a variety of incentives such as travel cover, purchase protection and insurance. Some of these 'extras' can be very worthwhile, while others don't really add up to all that much (for proof look no further than the number of competitions and prize draws continually being run). Most cards are covered against Internet fraud, but it is usually worth taking out additional protection. A number of companies offer this such as Sentinel and Credit Card Protection. To compare credit cards effectively you need to be clear about what is important and what isn't. In real terms favourable APRs and good balance transfer rates mean much more than what the card looks like and what 'rewards' it promises.

 

 

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