Simply enter your current balance, interest rate then either the amount you’d like to pay off each month OR the time in months that you’d like to clear the debt into the credit card calculator

3 reasons why it’s good to own a credit card
i) online protection – if you purchase something online worth between £100 (maxium limit of £30,000), the credit card company will be jointly liable with the retailer. So if the item goes missing, or it’s faulty, you’ll be able to claim a refund from credit card company meaning you wont be out of pocket! Is that nice, or is that nice!!?? (this falls under section 75 of the Consumer Credit Act in the UK)

ii) interest free loan – some companies offer a 0% interest rate for a fixed period of time – usually 3 months. So if you wanted to buy a high value good that you knew you could pay for in 3 months, but didn’t want to shell out the full cost of it upfront, you could (and should) use an interest free credit card.

iii) you build a credit history – if you’ve just graduated from university and you want to take a loan or get a mortgage, lenders will be cautious about lending any money to you if you don’t have a credit history – they want to know if you’ve borrowed money in the past and paid it back! Getting a credit card with a small limit (eg £200) will do this. Just make sure you pay on time each month, and preferably pay the whole balance at the end of each month.

How to improve your Credit Rating / Credit Score:

Your Credit Rating is a measure of how financially attractive you are!

A low credit rating will make it difficult for you to get accepted for credit cards, loans, mortgages and any type of borrowing that you may want to get from a bank or financial institution.

Take these steps:

1) Build your credit history / Get a credit card (if you don’t have one) – if you’ve recently graduated and you’re trying to get a loan or mortgage, a lender will want to see evidence that you’ve borrowed money and paid it back on time in the past! You may be proud if you’ve never owned a credit card before, but not having had one can actually harm your chances of getting credit.

2) Pay your cards off on time – whether that’s the minimum of full amount each month (the full amount is obviously better). Missed or late payments stay on your credit record for 3 years!

3) Get on the Electoral Roll – this helps agencies to verify who you are. If you’re not on the Electoral Roll, there’s a strong likelihood that you’ll get rejected for credit! Even if you’re good with money. You MUST vote every time that there are elections being held – whether National or Local! Having voted in the past and still staying at the same address isn’t sufficient. It’s imperative to vote every time there are elections. If you can’t get on the Electoral Roll because you’re not eligible to vote, or are a foreign National, then you should send proof of residency to the various agencies and ensure they add a note to verify your existence. This wont make you eligible to vote, but will help with credit applications.

4) Stability helps! Lenders don’t like people who move around too much. Being at your current address for longer helps, and so does being with the same employer and having the same bank account. Inputting a fixed landline rather than a mobile number on an application also helps them verify who you are.

5) Don’t apply for credit too often! If you apply for a credit card, you should leave a period of at least 6 months before you apply for another one. If you’ve been rejected for a card, and you apply for several others within a short space of time, it looks like you’re desperate for credit! Lenders don’t like desperados!

There are two key things you want to consider when getting a credit card

1. Purchases
2. Balance transfers

Purchases – if you want to purchase a ‘big-ticket’ item eg a TV for £1,000 or a sofa for £2,000 but you want to borrow the money at 0%, then getting a credit card that offers 0% on purchase for an initial period is a good idea. Most will offer 0% interest on purchases for the first three months. But you need to make sure that you can afford to pay off the amount of your purchase within those first three months/that initial period to make sure you don’t end up paying any interest!

Balance transfers – if you have a large amount of credit card debt eg £5,000 on a credit card with an interest rate of 17.9% and you think that it will take a while to pay off, then it would be worth seeing if you can transfer the £5,000 debt/balance to another credit card, which could offer 0% on balance transfer for 6 months, for example, on the condition that you pay an initial ‘transfer’ fee.

Credit Cards – contrary to popular belief, credit cards can actually be good for you! Paying for something on a credit card, then paying off either all or a large chunk of the balance within a few months shows lenders that you can borrow money and pay it back!

A better credit rating will, logically, result in offers of credit cards with lower interest rates.

This helps to build and/or improve your credit rating. There are two main credit check companies in the UK – Experian and Equifax.

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