New credit cards can ‘ease the pinch’

The global credit crunch may be prompting both consumers and lender to tighten their belts, but a number of new credit cards have recently been launched which could help ‘ease the pinch’, it has been reported.

According to the online resource Thrifty Scot, a number of credit card companies have brought out new products which could benefit consumers.

The website highlighted the Halifax all in one product, the Saga credit card, the American Express card and Abbey’s Zero credit option.

However, the news provider also pointed out that an industry official remarked Abbey’s card is not necessarily the best option around:

“Around 80 per cent of credit cards offer a lower standard APR on purchases compared to Abbey’s Zero card…its standard balance transfer rate of 18.9 per cent is among the highest go-to rates on the market.”

Meanwhile, recent research by Fairinvestment.co.uk revealed that 21 per cent of people surveyed say zero per cent balance transfer is the most important feature of a credit card.

Tags: online resource, Financial services, consumers, crunch, zero card, Saga credit card, belts, transfer

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Credit card holders becoming more savvy

It is something that many of us have done in the past, but the UK payments association Apacs says that fewer of us are making purchases with our balance transfer credit cards.

The organisation warns that people can get stung by spending on the cards, which are originally taken out in order to avoid paying interest.

In the past, many people found themselves transferring their balance to a new card, only to purchase more products.

This can put the cardholder in a dangerous situation as some credit card providers will revert you back to a normal interest rate if a payment is missed.

However, as a generation of cardholders grows up, Apacs believes that this practice is becoming less common.

“The point is that if you are taking out a balance transfer card you should only use it for balance transfers,” said Sandra Quinn from Apacs.

“Don’t do other things with it. I think increasingly people are starting to realise that.”

People who continually transfer their credit card balance between providers in order to benefit from zero per cent balance transfer rates are popularly known as rate tarts.

If you want to join the rate tarts and benefit from good introductory offers, make sure that you will be able to keep up the repayments and avoid making purchases on your new card.

Tags: apacs, transfer, payment, Don, credit card balance, new card, credit card providers

Available Types Of Credit Cards

Credit, credit, everywhere …

Everywhere you look these days companies are offering you credit. There are hundreds of different brands of credit card available and there are dozens of different types of credit card too. We take a brief walk through some of them.

Reward cards

Reward cards offer points to be redeemed against specific purchases such as Nectar points, Air Miles or cash equivalent points to be used at specified retail outlets. Many global retail outlets like Virgin and Sony do their own cards to encourage brand loyalty. The Sony scheme, for example, is called Pulse Beats and points can be collected and used as discount against a whole range of Sony goods. The interesting twist here is that you get triple pulse beats if you use your Sony credit card in a Sony outlet.

Cashback

Cashback cards give you money back on your card every time you use it. Typically cashback is about 2% of expenditure and will be awarded annually although you’ll be able to see how much you are owed on your monthly statements.

Charity Cards

Charities have never been backward in utilising every possible way to raise money, so the introduction of charity credit cards was a predictable step. Usually the charity receives a donation from the lending company for every application for the card they receive and a small percentage every time you make a purchase. This kind of affinity can be very helpful for the charity, as an example, since its launch in 1996 the MBNA Childline charity card has raised over £100,000.

Balance Transfer cards

Many cards offer zero percent incentives on balances transferred from other cards. These are to encourage people to change and many do, often! These 0% balance transfer cards were supposedly to encourage people to be loyal to the particular card they swapped to. But as it’s so easy to change, many people become what are called “rate tarts”. Most of these credit cards offer substantial zero percent periods such as 9 to 12 months as the big lenders battle it out between each other, but watch out for the APR when the holiday is over!

Store cards

Store cards are still credit cards, but many people think of them as being different. All you are doing is getting credit from a particular retail outlet to buy their goods. Infamously the interest rate on these cards is very high, so many people end up paying well over the odds for items they buy using these cards and leave a balance on them for any length of time.

Pre-paid cards

These were designed for people who have poor credit ratingsand are an alternative to ‘Bad credit-credit cards’. Pre-paid cards require the owner to pay a sum up front when they apply for the card, so there is no credit as such as you are then spending your money. Hence there is usually no interest fee. There are of course all the usual requirements and penalties to ensure the user stays within their spend limits.

Gold and Platinum cards

In the nineteen eighties, once the initial wow factor of credit cards started to subside, elite cards were introduced. Like so many things in the image conscious eighties these gold and platinum cards supposedly said something about the user. Usually they required a minimum income which was higher than average and so indicated that the user was a financial success. There was an exclusivity about them. These days all that has gone. Most of the gold and platinum cards simply offer slightly different features in a lenders range of credit cards.

The array of credit cards available today is remarkable and given the convenience of the plastic is it any wonder?

Tags: transfer, Beats, Virgin, Stored-value card, reward cards, particular retail outlet, Credit history, Gold