Published on July 30th, 2013 | by Pete1
Benefits of credit cards
For many people credit cards offer an ideal way to pay for goods and services. They’re more convenient to carry than cash and allow you access to a pre-agreed range of credit. This means that, unlike debit cards, you can make payments on your credit card even if you don’t currently have the funds in the bank.
Most credit cards have an interest-free period. This means that, as long as you pay your balance off in full by the date specified on your statement, you will not have to pay any interest. Essentially you are able to borrow money for free.
Drawbacks of credit cards
As with any type of credit you should always use your credit card responsibly. Don’t forget that putting purchases on plastic is just like spending ‘real money’. You still have to pay it back and, of you don’t keep on top of your spending and repayments, it can be easy to get into difficulties.
Choosing the best credit card for you
There’s no such thing as a single credit card that’s perfect for everyone and the best one for you will depend on your own circumstances and usage habits. If you pay off your balance in full each months you can take advantage of the interest-free period and you could also earn extra rewards by taking a card with a cash back or points-based rewards scheme.
If, on the other hand, you do sometimes have an outstanding balance on your due date, a card with a low standard rate might be best. Remember that even if you don’t pay off the full balance owed, you should at least make sure you pay the minimum amount due. Failure to do so could trigger late payment fees and have an adverse effect on your credit rating.
If you have a large outstanding balance on a card with a comparatively high rate, it may be worth looking into balance transfer cards. These allow you to transfer the money you owe from your current card to the new one. This will be at a preferential rate of interest (often 0% or interest free) for a fixed period of time. There will usually be a fee to pay when you make the transfer but this will often be less than the interest you would otherwise pay.
Some cards also offer 0% on purchases for fixed promotional periods. This can make them useful sources of credit for larger purchases but with any promotional offer you should pay back the balance by the end of the period if possible, as any remaining balance will typically revert to the card’s standard rate when the promotional period finishes.
The Asda Money Cashback Credit Card has a low 14.9% representative APR variable. In addition to this, the credit card also features 1% cashback on Asda shopping, 1% cashback at Asda Petrol stations and 0.5% cashback everywhere else.