Credit cards offer consumers several features that can be used to their advantage, and if used properly offer a completely free service.
Credit cards have always had a bad reputation as an easy way to fuel debt. However, providers have been working hard to shake off this stigma, offering features that are designed to help consumers to manage their spending effectively and in some cases even help to reduce their debt in the cheapest possible way.
These days most credit card deals offer a main feature that will attract a specific customer type depending on what they require.
For example, if a consumer has existing debt and currently pays a high APR on the balance they would benefit from transferring the debt onto a card that offers a 0% balance transfer feature as once the transfer fee is paid (usually 3% or so) they can effectively freeze any interest charges on the debt and begin to pay it off within the 0% duration.
On the other hand if somebody has no debts, they might go for a rewards credit card as this will allow them to replace their current payment methods (cash/debit cards etc.) with a card earns reward points or cashback for every pound spent.
Another popular feature is the 0% purchases duration which is best for those that wish to make large purchases while spreading the bill across several months without having to pay any extra for the privilege. Think of this feature as a finance deal that comes interest free for the number of months offered.
These cards currently come with 0% durations of up to 13, allowing consumers to pay off their balance within this time, interest free.
Anyone that has a bad credit history is unlikely to be approved for a standard credit card, however there are cards out there that actually help people to repair their credit rating.
Bad credit cards are specifically designed to lower the risk to lenders by applying higher than average rates to help build trust which in turn helps to increase the chances of being approved for future borrowing, while increasing the number of available deals providing the account stays clean through consistent payments made on time.
The golden rule with all credit cards is to always ensure at least the minimum monthly payment is made, without fail. This will not only reduce the amount of interest you pay, but also help you to avoid charges and potential black marks made against your credit score.