FAQs: Credit Cards
Written by Robert Bester, Consumer Finance Expert Robert has been a writer for six years, specialising in consumer finance and the UK lending market. Concentrating on consumer credit products, Robert writes informative articles that help customers manage their personal finances efficiently.
30th November 2020
3 minute read
Can I use my credit card to withdraw cash from an ATM?
You can use a credit card to withdraw cash from an ATM, however doing so will usually incur a charge. It’s advised you use your credit card to make actual purchases; a debit card is the more suitable way to withdraw cash.
Can I use my credit card abroad?
Generally, you will be able to use your credit card to make purchases abroad just like at home. However, you may be charged a ‘foreign transaction fee’ which will be charged as percentage of the value of each transaction made, so using cash where possible is advisable.
These fees can also apply to purchases made at home but in foreign currency. For example, Shopping online and making a purchase in dollars. If you’re unsure check with your card provider.
There are some credit cards specifically designed for people who travel and use their card abroad often that charge 0% on foreign transactions.
Do I always have to pay interest on purchases made using my credit card?
If you pay off your full balance at the end of each month, you should have to pay any interest.
Interest will be charge for any outstanding balance at the end of the credit cycle, usually at month’s end. However, if your card comes with an introductory 0% interest period, then as long as you make the minimum monthly payments for that introductory period, you won’t be charged any interest at all.
Can I still get a credit card with a poor credit score?
If you have a poor credit rating, it’s likely you’ll struggle to get the best deals on credit cards. You may even be refused altogether when applying for a conventional credit card.
In this case, consider getting a credit building credit card. Using these cards over time, with their typically high APR and low credit limit, will help you to improve your credit score. Putting you in a better position to borrow in the future.
Are my purchases protected if I pay by credit card?
The 1974 Consumer Credit Act provides extra protection on purchases over £100 up to £30,000. The amount spent on the card could be lower than the minimum £100, as it goes off the value of the good. E.g. if you were to pay a £30 deposit on an item that is £300 on your credit card and the rest on your debit card you will still be covered.
Chargeback protection covers purchases less than £100.
Can I repay credit card debt early?
Yes, you can repay at any time.
What's a balance transfer card?
These cards can be used to move existing debt to a new card in order to benefit from lower interest rates. A fee is usually applied for taking out this kind of card, which is a percentage of the amount transferred. A balance transfer card can help you clear your debts, however if you fail to pay off the balance by the end of the introductory interest period you may be paying a much higher rate.
What's a cashback card?
With a Cashback card you can earn money back on any purchases made. The amount you can earn depends on the card you choose; often higher rates are offered for an introductory period.
What's a rewards credit card?
A reward card works like a cashback credit card, but you receive rewards instead of cash when you spend. These rewards can be things such as store loyalty points, travel discounts or vouchers.
What is an air miles’ card?
Air miles’ cards are another type of reward card, when you spend you will earn you points for things such as flights, upgrades or other travel schemes.
What's a premium credit card?
Premium credit cards offer a range of benefits such as cashback and reward points, it varies depending on the card you choose. These types of cards require an excellent credit rating and usually charge an annual fee.
What's a student credit card?
These cards are designed specifically for students, as they have a low credit limit and you are likely to be required to have a student account with the provider.
Are store cards the same as credit cards?
A store card isn’t the same as a credit card however they can work in a similar way and still involve a credit agreement. They can only be used to make purchases with a specific chain of stores and the terms are typically less attractive than a credit card.
Can my credit limit be increased without permission?
Credit card providers can increase your limit without you agreeing, however you have 30 days in which you can reject the increase.