Apply for a Credit Card

The procedure to apply for your new credit card is quite simple...

To apply for a credit card be you must:

• have a permanent UK address 
• be over 18
• not have been declined for credit in the last month
• not have a history of bad credit

To apply for a credit card, be sure to have the following to hand:

• your bank/building society account details
• details of any loans, credit cards/store cards you have: and  
• your employer's name and address.

What is a credit card?

A credit card is a form of borrowing. You can apply for one from a bank, building society and certain high street stores. If they accept your application, they (your card issuer) will set you a credit limit (the amount you can borrow).

How does it work?

You can use your credit card to buy goods and services and you'll get a statement each month showing how much you've spent. You have to pay back at least the minimum amount shown on the statement each month. The card issuer will charge you interest each month on any money you still owe (the outstanding balance). A credit card gives you the freedom to buy.

Things to watch out for...

The late payment trap
Your statement will show that you must make a payment by a certain date each month. If you miss it, you may be fined a late payment charge. If you're behind with your payments, this could also show up on your credit history, which another potential lender might also see.

An easy remedy: ask for a direct debit form from your card issuer. You can then choose to pay off the full balance every month, or the minimum payment, automatically from your bank account.

The minimum payment trap
It's easy to slip into a pattern of paying just the minimum payment each month. But it means, of course, that interest is building up, month after month, on every pound you owe. If you can't pay the balance off, at least try to pay a bigger amount each month. 

The cash trap

Don't confuse credit cards with debit cards when you're at a cash machine. If you use a credit card to withdraw cash, you'll normally be charged an extra fee every time. Some credit card companies also offer credit card cheques but bear in mind that they charge interest from the moment they're used.

The store card trap

Many leading shops and stores have their own credit cards. They offer benefits such as extra discounts for cardholders only, and preview days for sale goods ahead of the general public.

However, many store cards carry very high interest rates if you don't pay them off immediately - in some cases, double the cost of ordinary credit cards. Be careful to check their APR rate before taking out another card.

Other ways to borrow

Credit cards have their advantages, but they're not always the right choice. If you can't pay for what you're buying and need the help of some extra funds, consider a bank overdraft or a personal loan - see Loans for more information.

Top tips

• Set up a direct debit to make sure your minimum payment is made each month.
• Ask yourself whether credit cards are the best solution - a loan might be cheaper.
• Don't use credit cards for cash unless you have to.
• Don't sign up for a store card without checking its interest rate (the APR).

How credit cards work

Credit cards allow you to 'buy goods now and pay later' - called 'buying on credit'. They aren't linked to your bank account. Like debit cards, they can be used to buy goods in shops over the telephone and internet, with the same details being required. You can also get a 'cash advance' by drawing money at bank cash machines.

Your bank may offer you a credit card, or you can apply for one to any institution offering one. The credit card provider will normally run checks to see if you've had problems repaying debts before offering you one (called a 'credit check').

The risks of using a credit card

Think carefully before using a credit card. If you don't repay your bill in full by the date shown you're charged interest on the whole amount of the bill for that month. The rates of interest - indicated by the APR (annual percentage rate) - can be very high indeed.

If you take cash out with a credit card you're charged daily interest from the moment you take out the cash until the credit card bill is paid in full. This is an expensive way of borrowing money.

Credit Card Providers

• Abbey Credit Card
• Alliance and Leicester Credit Card
• Amazon Credit Card
• American Express Credit Card
• Aqua Credit Card
• Asda Credit Card
• BA Credit Card
• Bank of Scotland Credit Card
• Barclaycard Student Credit Cards
• BMI Credit Card
• Britannia Credit Card
• Capital One Classic Credit Card
• Capital One Platinum Credit Card
• Citibank Classic Credit Card
• Co Op Credit Card
• Barclaycard Credit Card
• Cahoot Credit Card
• Capital One Credit Card
• Egg Credit Card
• Halifax Credit Card
• Intelligent Finance Credit Card
• Marbles Credit Card
• Morgan Stanley Credit Cards
• Virgin Credit Card
• First Direct Credit Cards
• GE Credit Card
• Goldfish Credit Cards
• HSBC Credit Card
• John Lewis Credit Card
• Lloyds TSB Credit Cards
• Marks and Spencer Credit Card
• MBNA Credit Cards
• Mint Credit Cards
• National Trust Credit Card
• Nationwide Credit Card
• Natwest Credit Cards
• Natwest Gold Cards
• Nectar Credit Card
• Post Office Credit Card
• RAC Credit Cards
• Royal Bank of Scotland Credit Card
• RSPCA Credit Cards
• Saga Credit Card
• Sainsbury's Bank Credit Cards
• Sky Credit Card
• Smile Credit Cards
• Sony Credit Card
• Tesco Credit Card
• Texaco Credit Cards
• Thomas Cook Credit Card
• Virgin Pay As You Go Card
• Yorkshire Bank Credit Card

To contact an advisor call 0800 074 6918. Alternatively complete an online enquiry form and an advisor will call you back at the time that you specify.

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