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Credit Cards

Credit cards are hugely popular in the UK, with many millions of them in the wallets and purses of consumers up and down the country. Their rapid rise in popularity since their introduction can be attributed to the convenience that they provide to the consumer, both in terms of allowing them to buy what they want when they want it and pay for it at a later date, and removing the need to carry cash around with which to purchase goods or services.

The benefits offered by credit cards are not limited to their wide acceptance by retailers and convenience for the customer, but they also provide a level of protection to the customer using the card in a number of cases. Because the card provider is giving the cardholder credit each time the card is used, the transactions are covered by the consumer credit act 1974. This act puts in place various protections for the consumer, so in circumstances where goods are faulty, are not received or the company goes into liquidation without providing the goods, the consumer has recourse against the credit card company to get their money back. There are limitations and caveats to this, and it only applies to purchases over one hundred pounds, and less than thirty thousand pounds.

Credit cards do have their drawbacks, firstly they have made it easier for people to get into debt, and the rates of interest charged on the cards are often high making it hard for people to clear the debt. If you are in such a situation you may wish to consider a debt consolidation loan, which can be used to pay off such high-interest debts and leave you with a more manageable loan to repay.

Another drawback to credit cards is the potential for fraud, something that has been exploited greatly over recent years, with the practice costing hundreds of millions each year. There are many methods used by the fraudsters to get credit card information, from stealing the cards from the post before they get to the customer, to using card skimmers to copy the data from the card and then write it back to another in a process known as cloning. The costs of these fraudulent uses of card details are born by the card issuers, so it doesn’t directly cost the cardholders any money, hover the costs are passed on in terms of card fees and interest rates, so keeping your card safe is important.

Due to the high levels of card fraud the association of the card issuers have introduced the new chip and pin style cards, which do away with the signature in favour of the customer’s pin number being entered, the card data is also stored more securely on a microchip embedded in the credit card. The irony is that the introduction of these cards actually fuelled an increase in the amount of credit card fraud, as with the increase in the number of new cards being sent in the post, the fraudsters had potential access to many more cards. Despite this short-term rise in fraudulent activity, the card issuers are confident that the chip and pin system will see a decline in card fraud long term.

Credit cards are a useful and convenient means of payment, and are used by many people for a variety of purchases each and every day. Keeping track of credit card bills is important as the high rates of interest could easily result in you paying more than you need to, and it is all too easy to get into debt using these cards. We offer a range of debt consolidation loans for those wishing to take control of their debts and improve their financial situation.

If you, like many, have outstanding debts on you credit card, then we recommend that you move these to a consolidation loan which offers you a lower rate of interest and which will save you money on your interest payments.