Consumers need to ‘understand the whole product’ when buying a credit card

Spenders need to know what they are getting when they shop for a credit card, one financial advisor has claimed.

Credit Action said consumers need to take some time and effort when choosing a credit card, just as when choosing a car.

Chris Tapp, director of Credit Action, stated that people need to understand the principle behind cards, which is to make sure that the amount borrowed on it can be paid off the following month.

“That is the way to avoid getting hit with all kinds of charges, to make sure you are only borrowing as much as you can pay back,” he said.

He added that the main thing to look for is the headline rate and to compare this rate of the interest between card providers to ensure the best deal is found.

Meanwhile, MoneyExpert.com research released at the beginning of the month shows that 3.2 million spenders own five or more credit cards and 28 per cent of us applied for more plastic last year.

Tags: Credit card, Credit Action, choosing, credit, rate, financial advisor, interest rates, headline rate