Things To Consider When Applying For A Credit Card
A credit card can be a convenient way to buy everyday items like shopping and petrol, and those one-off purchases like a holiday or a new TV. It can also be useful for those unexpected expenses like a boiler breakdown or car repairs.
As part of our commitment to helping you make an informed decision, here are some things to consider when applying for a credit card.
- What features and benefits can I expect?
- What commitment do I need to make?
- Are there any risks?
- What else should I think about before I commit?
What features and benefits can I expect?
A credit card is a flexible and convenient way of borrowing money in the short term. It can offer interest-free, short-term credit on purchases, as long as you always pay the balance in full and on time. It’s a safe and versatile way to pay for goods and services and offers protection against fraud. Some credit cards allow you to transfer higher interest debt to a card with a lower interest rate, however, you may be charged a balance transfer fee for this service.
Your card limit is based on an assessment of your income and borrowing commitments. We’ll tell you your limit after your application is accepted and this figure will appear on your monthly statements. If you prefer a lower limit, this can be reduced. After six months, we’ll be happy to review your credit limit based on an assessment of your ability to pay the new amount.
We offer a variety of credit cards, all with different features and benefits as well as online servicing.
What commitment do I need to make?
Your biggest commitment is to pay back what you borrow plus any interest charged and stay within your credit limit. Each month you must repay at least the minimum payment on time as shown on your statement. Please read the terms and conditions carefully so you understand how your credit card works.
Even if your card offers an interest-free period on purchases, if you don’t pay your bill in full each month you will be charged interest on your purchases. By only paying the minimum each month, you pay more interest over a longer period and it takes longer to clear your balance. Interest charges will apply on any balance transfers, credit card cheques or cash withdrawals made on your credit card even if you pay your balance in full.
If you miss or make a late payment, you’ll be charged a fee. To help avoid late payment fees, you can pay a fixed amount or the minimum or full amount by Direct Debit each month. It’s also important you keep within your credit limit to prevent incurring a charge. Click here for a list of charges. Missing a payment could also affect your credit rating which can make it difficult to obtain future credit.
What else should I think about before I commit?
If you need to take money out of a cash machine, remember that a credit card isn’t a debit card and you’ll be charged interest and a fee. If you withdraw cash overseas, you’ll also incur an additional fee.
Don’t forget, you can close your credit card account at any time – our products have no tie-ins. However, you must clear any outstanding balance first. When you apply for a credit card, we'll usually check your credit history with a credit reference agency. If you apply for lots of credit, this could have a negative impact on your credit rating.
Credit cards have many advantages but they may not be for you. If you don’t have the money to pay for what you’re buying and need extra funds, you might pay a lower rate of interest with an arranged overdraft or personal loan.
