Should I Swap Credit Cards?

If you have a credit card, you may wonder whether you might be better off swapping to a different lender. There are different things to consider and it is worth having a think before you decide whether this will be a good idea for you.

Interest Rate

The interest rate can be a big influencer when it comes to credit cards. They can often high interest rates compared to other types of lending and therefore it is a good idea to check them out and see how your card rate compares to others. If you always repay the card in full each month, it is likely that you will never pay interest on it. However, you never know when you might not be able to afford to repay it, so it is always worth keeping in mind how much the interest rate is, so that you will be able to keep that in mind. If it is extremely high, then you might decide that it will be better to swap to another card just in case you do not repay it in full. If you do tend to owe money on your card, then the interest rate will be extremely important. It will be something that you will need to think about and if you can get a lower interest card, then the borrowing that you are doing will be cheaper. So swapping to a lower interest card, could be particularly beneficial for you.

Rewards

Some cards offer rewards to their customers. This might be some sort of points to spend on things, discounts, air miles or even cash. They can be very enticing and great for some people. If you always repay your card in full, then they can be great for you. This is because it is often the case that these cards will be higher interest so, if you have an outstanding balance, the value of the reward will not make up the extra cost you are paying in interest compared with standard cards. However, it is well worth checking as this might not always be the case. It is wise to be careful with these though. You may use the reward as a way to justify spending more money than you normally would or more than you can afford because you are getting some money back. You do not want to do this as the money that you are getting back will only be a small amount – probably a very small percentage of what you spend. Therefore, you need to think to yourself, being very honest, whether this might happen with you or whether you will be self disciplined enough to just use the card as normal.

Lender

It is worth having a look into the lender as well. Look at some information about the card issuer and what they are like. You might be especially interested to find out what their reputation is like, how well they treat their customers and things like this. You might be able to read some reviews online but remember to use trusted sites and think about the review carefully. Note what people are saying and whether things that they like and dislike are important to you or whether they are not. It is also good to speak to friends and family about it if you can. Talking about finance can be difficult with some people but it can be really handy if they can give you some useful advice and feedback. People are often very willing to help you as well, particularly if they have had a particularly good or bad experience that they would like to share.

Should I Repay the Minimum or the Credit Card in Full?

If you have a credit card, when you get your statement you will be given two main options – to repay the card in full or to pay the minimum. You may wonder which to do. It is worth understanding the consequences of each so that you can make the right decision.

Repaying in Full

If you repay what you owe in full by the date it needs to be repaid, then you will not have to pay any interest on the credit card. This means that you will be using the card for free (unless there are annual charges). This can be fantastic because you get the benefits of the credit card without any extra charges. You can even set up an automatic payment so that the card issuer takes the money from your account automatically which means that you will never forget to pay your bill and you will be able to ensure that you will never have to pay any interest. However, if you do this, you will need to keep a close eye on what you are spending on your card. This is because when the payment comes out automatically, it could mean that you will be left short of money because you have spent a lot and it could even mean you do not have enough to cover the other basics that you need to buy. So, make sure that you are careful if you do this.

Paying the Minimum

If you only repay the minimum amount each month, you will find that you will be charged interest. Interest on credit cards can be relatively high compared to other types of borrowing, so it is wise to take a look at the amount that they charge. When you get your monthly statement, it will let you know how much you will be charged in interest on the card. You will be able to see that amount and use it to decide whether you are going to repay the minimum or the full amount or something in between. If you just repay the minimum amount you will normally just be repaying the interest and a very small amount extra to repay some of the balance. If you continue to do this and spend no more on the card, you could find that it will take a very long time for you to repay your card. It could take years. If you keep spending on it, then it is likely that you will never clear the debt. You may be happy with this and be okay with paying this interest in return for having that extra money. However, it is wise to make sure you calculate how much interest you are paying in a year and think about whether you really think that it is offering you good value.

Paying Some Other Amount

Many people do not realise that it is possible to repay any amount off your credit card. This means that you are not forced to either repay it all or just the minimum. If you would rather pay more than the minimum but cannot afford to repay all of the balance then you can send a payment for what you wish to. This means that you will not be charged as much interest as if you only repaid the minimum and you will be able to reduce the debt that you owe. It can be a good alternative to repaying the full balance as you will repay the debt more quickly than if you just repay the minimum but it will be more affordable in some cases. Of course, it is best to repay everything that you owe, but this is a handy alternative if you know that you would struggle to manage this.

How to Pick the Best Credit Card Issuer

There are lots of companies that issue credit cards and it can be quite confusing knowing which one to choose. There are ways that you might choose between cards, such as comparing the interest rate, any rewards they offer and how much credit they offer you, but you will also need to think about the credit card provider when you are picking. There are different things that might be important to you and it is a good idea to check out some of them so that you can decide what is important to you and which lenders fulfil your requirements.

If They are Well-Known

Some people only like using a credit card company if they have heard of them. They feel like the more well-known companies can be trusted more. This is natural but it is worth thinking about whether this is a worthwhile attitude to have. Think about why you have heard of the lender and you probably will not know, in most cases why you know them. It could be that you have read a new article about them when something negative happened or that you have seen an advert. Is that a reason for using them? It might be better therefore to consider whether this is actually something that you should be considering or whether you should be thinking about other things.

What Their Website is Like

It can be a good idea to visit their website, just like you would with guaranteed payday lenders. This will mean that you will be able to learn a bit more about them and their products. It can give you a feel for the company and it will enable you to decide what you think about them. It is also a good place to look for more information about them. You will be able to find out about how long they have been going, some background about them as well as what products they offer, if it is a good website.

Reputation

It can be reassuring to know that a credit card issuer has a good reputation. You might want to find out what others think of them so that you can decide whether you think that they will be a good company for you to use. It is a good idea to think about what you feel would make a good reputation so that you can see if they match up. It can perhaps be handy to ask people that you know what they think of the lender if they have used them. They might be able to tell you a bit more about them. You could also look at online reviews to find out what others think about them too. Try to go to a review page that you trust and that is unlikely to be biased.

Customer Service

Having good customer service is something that is important to a lot of people. If you want to get in touch with the lender, perhaps with a question or query or you have a problem, then you want to know that it will be dealt with well. You want to know that it will be seen quickly and dealt with efficiently by someone that is helpful and polite. You may also want to be able to get in touch in a specific way, perhaps in a branch, by phone or online chat. So, think about what you want and then try to contact the company that you are thinking of getting a card form. You will be able to see how they respond and you can judge whether you feel that you are happy with the way your query was dealt with.