A Look At Credit Cards

We all know about credit cards. We all think we know everything about them too. They are a staple of life in the UK and much of the world. However, it still helps to reassess their impact and their uses sometimes, so that is what we have done at Moolr. We’ve taken a look at credit cards.

What Are They?

A credit card is a secure, easy way to pay for items without having to carry money around everywhere. Cards will give you protection on purchases, and if repaid quickly do not need to cost money.

When anyone applies for a credit card, the lender will perform a number of checks. This is to check to see if they are suitable for credit. The main method is via a credit check. The details of which will not only affect whether the individual is accepted for a card, but also what credit limit and interest rate they will be offered. The better your credit rating, then the better terms you will tend to be offered.

Most credit card companies will send you a monthly statement in the post, though many choose to deal with payments exclusively online. They may also set up a direct debit so that payments are automated.

Credit card companies make money from interest charges and from those who may incur fees from missing payments. Thus, if you use your card sensibly and pay on time each month and/or take use of the many introductory offers available on the market, credit cards can be an excellent way of paying for items without incurring any costs.

Advantages of Credit Cards

An obvious advantage of credit cards is their convenience and ease of use. They allow you to buy a vast selection of goods both in person and on the internet seamlessly. Secure websites that allow you to store card details make the process even quicker and simpler.

Secondly, because you are not handing over money at the time of the transaction, credit cards allow you to defer payment. This deferment can be until your next bill needs to be paid. This is especially useful if there is an urgent need for a purchase, but you don’t yet have the funds to pay for it.

One other important consideration is the protection provided by using a credit card to make a purchase. Any purchase of between £100 and £30,000 is covered by the 1974 Consumer Credit Act, Section 7. This guarantees you will get your money back if the transaction goes wrong. Whether the company you purchased from goes out of business, should your item develop a fault, or you never receive it, then you will have the peace of mind that you won’t be out of pocket, because you can claim back the money from the credit card provider.

Finally, as you may be aware credit cards tend to come with a raft of introductory offers. These could be balance transfers, o% interest on purchases, cashback when you use cards and more. Every credit card will come with at least one offer, so with sensible use you can use credit cards without incurring any costs. It is possible to save money if it prevents you dipping into an overdraft. Seek out the best offers. Research thoroughly the terms of offers. Decide how long the offers are so you are not caught out.

Disadvantages of Credit Cards

If you fail to make your monthly repayments on a credit card, you will be subject to additional fees and interest rates. These can lead to your debts increasing. Thus it is important if you use your credit card that you make regular repayments. Make more than the minimum amount if possible, so as to avoid interest charges further down the line. Cards should be seen as a short-term facility to borrow funds, and not as a regular means of surviving until the next pay day. nor should they be used as a solution to long-standing financial problems. budget accordingly. Spend what you can afford to repay. Ensure that what you spend is necessary rather than an unnecessary treat.


Whilst credit cards can be used to withdraw money from a cash machine, there will usually be an extra charge for this. This can be up to 4%, and there are also added fees for using a card abroad. Sometimes though the exchange rate for the currency may be better than if buying currency back in the UK. Use bank cards if possible to withdraw money. If you use a card, check your terms first. See what it will cost. Decide if it is worth the cost to access the funds.

Finally, whilst many cards come with attractive opening offers that offer excellent value for a customer, these offers will inevitably run out at some point. When they so, they may incur charges thereafter as they are still running the card with a balance to be paid off.