Borrowing on a Credit Card

One of the easiest ways to borrow money of a financial institute is to use a Credit Card, available from all banks, building societies, and other financial organisations. The choices available are enormous, with a wide variety of interest charges, annual charges, loyalty schemes, and bonus points available. However there are two broad areas that you should look at:

Annual Interest Rate

Firstly if you do not intend to pay off your Credit Card bill at the end of each month, then you should look at the Annual Interest Rate (APR), this rate is typically between 13-17% at the moment, and you should be looking for a card that offers as low an interest rate as possible. You should also bear in mind that you are charged much higher rates of interest than other forms of borrowing money, so if you do not intend to pay of your bills for a long period of time, then you should seriously consider a different form of loan that is less expensive.

Extra Benefits

On the other hand if you do intend to pay off you credit card bill at the end of each month, then you should be more interested in the loyalty schemes that are on offer. These vary from being awarded points every time you purchase something (these points can than me used to purchased gifts or air miles etc), to simply being given 'Cashback' on everything you buy (typically 0.5%-1% of your purchase). You should also look at the level of service that your card company offers. They are obliged under law to offer certain protection to the consumer, but often they will increase this protection with other guarantees. Some offer extended warranties on electrical goods, extra travel insurance when you are on holiday, accidental damage insurance for any goods you buy, and even free commission on cash withdrawals when abroad.

Also some companies charge an annual fee for using their card (especially business credit card accounts), so these fees should be weighed up against the cards benefits.

Even if you usually do pay off your credit card bills at the end of each month, when you open a account you may be offered 6 months interest free credit. This is often an excellent way of saving money as you are basically given an interest free loan for 6 months. It is even more useful if you are allowed to transfer some credit card debt from a different company into the interest free offer. However there is a danger of becoming trapped in a bad debit cycle here, transferring your debt from card to card until it is completely unmanageable. The best advice is to make sure you always have enough money in the bank, or in a savings account, to pay off your debt when you are taking advantage of the interest free credit period. That way you benefit from earning interest on your savings in your bank, but as soon as the interest free credit period has expired, you can pay the entire bill off without being stung for high interest charges.

So to summarize

If you are not paying off your monthly credit card bills, look for a card that offers a low interest rate

If you are paying off your monthly credit card bills, looking for additional card benefits

Interest free credit periods are good news for saving money, but beware of being caught in a debt spiral

Credit Cards are an expensive way of obtaining a loan or borrowing money, and you should investigate other cheaper forms if you intend to borrow money in the medium to long term.

Alastair Taylor runs a website that tries to give the consumer the truth about how to save money on Financial matters as well as home improvement. Visit Whatprice to saves yourself time and money.

---

How To Protect Yourself Against Credit Card Fraud

In the high tech world of today, credit card fraud... Read More

Credit Help for Real Estate Financing: Five Categories of Your Credit Score

1. Payment History -- 35%The number of accounts paid as... Read More

The Hazards Of Your First Credit Card

You probably don't need me to tell you credit cards... Read More

Will Inquiries Lower Your Credit Score?

What are inquiries?When you apply for credit the creditor or... Read More

The Easy Way To Gain Access To Your Free Online Credit Report

When you apply for credit, those lending you the money... Read More

Credit Establishment 101

There will come a day when you need credit. You... Read More

Why Credit Cards are a Bad Idea

Credit cards are just so convenient, aren't they? There's no... Read More

Fixing A Credit Report

Fixing a credit report starts with seeing what's on it.... Read More

Learn How to Improve Your Credit Score

Having a damaging credit record can hurt you in many... Read More

Establishing Credit ? What You Need To Know Part 2

In my previous article "Establishing Credit ? What You Need... Read More

Credit Damage: Getting Compensated for Your Loss

Until recently lawyers for victims of credit damage had little... Read More

10 Simple Steps to Manage Your Credit

By far the greatest invention the banks have ever come... Read More

All Is Fair In Love, War, and, Your Credit Report - At Least It Should Be! Understanding the FCRA

Fact: Over 150 million Americans have credit report with the... Read More

Improving Your Credit Report

Even if you think you have a wonderful credit report,... Read More

The Best Strategy To Erase Credit Card Debt

Credit card debt is a growing sickness in the United... Read More

3 Ways to Improve Your Credit Score by 50 Points In Less Than 30 Days

In Less Than 30 Days. "What can you do to... Read More

Its Your Credit - Take Care of It!

Thanks to the Fair and Accurate Credit Act, American consumers... Read More

Inflexible Friends and Plastic Assets, Why Money isn?t Buying Love Anymore

Consumers reject financial advice in favour of financial frivolityIt would... Read More

Grants, Loans, Free Credit Cards And Credit Repair: The Whole Truth And Nothing But The Truth

You got creditors calling you everyday. You could lose the... Read More

Free Credit Reports - How to Maintain Your Credit Profile

Maintaining your Credit ProfileEvery consumer should be maintaining their credit... Read More

Identity Theft ? How Can You Prevent It Happening to You?

The nightmare of identity theft strikes an estimated 750,000 people... Read More

It Is In Your Best Interest To Do The Math On Your Credit Card Interest

If you begin foaming at the mouth once a month... Read More

Trying to Land a Job? Poor Credit Scores May Hurt Your Chances

Many employers are now looking at an applicant's credit report... Read More

Identity Theft ? Who Would Want Mine?

With all my bills who would possibly want my credit?... Read More

SuperCharged Secret 5, Credit Card Utopia

LIVING IN CREDIT CARD UTOPIALet's just take a brief moment... Read More

Watch Out For Credit Repairs

It is very easy to find a site that is... Read More

Credit Repair Scam - How To Avoid Being A Statistic?

A good credit history is critically important for the consumer.... Read More

Avoiding Credit Card Traps

The next time you open your credit card statement, take... Read More

Your Credit Score

Credit scores: all lenders use credit scores to determine interest... Read More

Credit Cards And Loans - So Many Options - So Little Time

Credit Cards and Loans sounds like just two things, but... Read More

Myths and Truth about Credit Scoring

Credit score is the key factor determining approval of almost... Read More

Credit Suicide

Few things influence the home buying process more than your... Read More

Credit Card Entrapment - The Secrets are Out

Have you ever wondered why your credit card bill is... Read More