Credit Cards

“Using a credit card for purchases gives you more protection.”

Credit Cards
from £1,000 – £35,000

Terms from 12 – 60 Months
From £1,000 – £35,000
Responsible Lenders
Loanable Limited is a credit broker & not a lender

Credit Cards
from £1,000 – £35,000

Terms from 12 – 60 Months
From £1,000 – £35,000
Responsible Lenders
Loanable Limited is a credit broker & not a lender

Getting a Credit Card

In the world of credit, there are a few landmark times in our lives, one is obviously getting a mortgage to buy a property, getting car finance to buy our first car, and also getting a credit card.

One reason for this landmark in our credit lives, is the fact that credit cards are a revolving line of credit, and can seem to be difficult to get approved for, and there are reasons for this.

The credit card issuers in essence says to you the card holder, here is a piece of plastic, with a credit limit, you can use it to buy anything you want, and you can make monthly payments on the balance you have on the account.

That is giving you the card holder and borrower, a lot of flexibility, and also, some responsibility.

You can walk into any store or shop that accepts credit cards as a form of payment, and make a purchase; your card is scanned, you enter your PIN, and a receipt is printed out, and you are out the door with your purchase.

It doesn’t get any easier than that.

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Convenience of Credit Cards

It is said that we are moving towards a “cashless society”, and when you think about it, it would appear that we are.

Everywhere you go now you can pay for purchases, from a cup of coffee, to buying a three piece suite using your debit or credit card. We can even pay for purchases now using our mobile phones and mobile banking.

Credit cards are a part of this new way to pay, even though credit cards have been around for over 60 years.

The convenience of paying by credit card is just one of the advantages of having a credit card; you don’t have to carry around a large amount of cash. If you are looking to buy an item and it costs £300, it is easier to carry a credit card with you to make the purchase, than a wallet or purse full of cash.

Credit cards are safer.

Other advantages of credit cards are:

Online Purchases: You cannot pay cash for purchases online, and if you are booking train or air fares, where on your computer do put the cash in???

You can use a debit card to make these purchases, but as we’ll see, using a credit card can afford you additional rights and warranties.

Need it Now – Pay Later: Suppose you come across a bargain, or something you are in need of and have been looking for, and you don’t have the cash on you at the moment to make the purchase, if you have a credit card you can buy the item, and pay for it later when the bill comes in, or pay for it over time by making payments to the credit card.

Book Hotels or Car Hire: In some instances if you book a hotel or hire a car, and you use a debit card, the full amount of the purchase, your full hotel stay, or the full cost to hire the car, can be placed as a hold on your debit card and bank account.

You no longer have access to that money, it has been held by the hotel of car hire firm. By using a credit card, your money is not held or tied up.

Additional Protection in the Form of Warranties and Rights: Especially for online purchases, but also for other goods, and even holidays, if you use a credit card and make a purchase over £100, and up to £30,000, you are “”protected by ” “”Section 75” of The Consumer Credit Act.

This act means that the credit card company is jointly liable, just a liable as the retailer or trader, for any breach in the contract or misrepresentation.

Using a credit card for purchases gives you more protection.

Cash Advances: You can also use your credit limit on a credit card to take what is called a “cash advance”. This means you can go to a cashpoint or ATM, and using your credit card take out cash. This can be helpful if you are looking to make a purchase and the shop for some reason does not accept credit cards, or you find yourself in a situation where you need cash.

You need to be forewarned that cash advances on a credit card are treated differently than a purchase, and there can be fees associated with the transaction, and also a higher interest rate may apply.

Travelling and Currency: When travelling abroad using a credit card is not only convenient, but it also allows you to receive the current exchange rate for the currency your purchase may be sold at. While this can be convenient and beneficial, you also need to be aware if the issuer of your credit card charges any fees that are “non-sterling”.


In addition to protection on purchases by using a credit card, you can also receive certain rewards for being a card holder.

Cash Back: Some credit cards offer cash back on purchases. The card issuer will offer a percentage of your purchases in the form of cashback, an example may be you use your credit card to buy something for £100. If the card offers a 1% cashback on purchases, you would receive £1 as a cash back bonus.

Frequent Flier Miles: Some credit cards are attached to an airline, or other company, which then as you use the card, you can build up frequent flier miles, or frequent user points. These miles or points can then be redeemed for flights, or other purchases.

Bonuses: In place of cash back or points, there are credit cards that offer bonuses or other rewards for being a cardholder of that particular credit card.

By being a cardholder you may be able to purchase tickets to a concert or show in a pre-sale, before the general public. Other bonuses may be access to shows not available to the general public, or sales on “hot-ticket” items that sell out quickly.

Just a few of the bonuses or rewards that can be offered to those holding some credit cards.

Terms You Need to Know

Credit Limit: This is the limit or maximum amount you can use or charge on your credit card. If you have a credit limit of £1500, you can only charge in total this amount in total. This can be smaller charges equalling £1500, or one single charge that is £1500.

Your credit limit includes all charges and cash advances.

APR: This is the interest rate you are charged on the purchase you make shown in an annual or yearly rate. “”APR or annual percentage rate, is the interest rate expressed in a yearly amount, and you only pay interest on the balance that is on your account/card.

Minimum Monthly Payment: This is your monthly payment for any charges you have and the balance on your credit card. The minimum monthly payment is just that, the minimum you have to pay each month towards the account. It is usually 2.5% to 3% of the outstanding balance on the account/card.

An example may be if you have charges and a balance totalling £2,000 on your credit card, your minimum monthly payment may be around £50 to £60.

By just paying the minimum monthly payment each month, it can take many years to pay off the balance on a credit card; it will depend on the interest rate being charged. In some instances, your minimum monthly payment may only pay the interest, and a few pounds toward the actual balance or principal.

This is why it is always good if you can pay the full amount due each month, or more than the minimum monthly payment.

Recent Charges: These are the charges on the account during the preceding accounting period. This is usually 28 to 30days. Any charges, purchases or cash advances, during this period, will be reflected on your statement.

Balance: This is the total amount owed on the credit card, the balance of all charges or cash advances.

Payment Due Date: The payment due date is the date that the minimum monthly payment must be received by the credit card company. Any payments after this date may be considered late, and could incur a late charge or additional interest.

Types of Credit Cards

Just as there are various types of loans for various needs, there are different credit cards for different needs.

In essence all credit cards do the same thing, offer a way to conveniently pay for a purchase, but there are subtle and not so subtle differences between cards.

Store Cards vs Credit Cards: Specific store credit cards are only good in that particular store.

If you have a store card for the Widget Shop, that credit card is only good in the Widget Shop. You cannot use your Widget Shop card in any other store, shop, or online, unless it is the Widget Shops web site.

Major credit cards, such as Mastercard, Visa, American Express, or in other countries, Chase, Citibank, and Discover, can be used in any store or shop that accepts these cards, which is usually most shops and stores.

As to which credit card is best, there are benefits to both, however, in the end, a major credit card may be the better option. Major credit cards are accepted in more places (now this sounds like an advert), and can offer better rates and rewards.

Pre-Paid Cards: These are credit cards that you load with your own money. You put or pay £500 towards the credit card and you have a £500 credit limit.

Pre-paid credit cards are good for those that wish to have the convenience of a credit card, but don’t want to find themselves in debt, or are trying to build a credit history.

The caveats here are:

* Does the credit card company report to the credit bureaus, if not, using this type of credit card will not rebuild a credit a poor credit history, or build any credit history.

* Fees: There can be fees associated with using a pre-paid credit card and accessing and spending your own money; money you loaded or paid to the card. The card provides you convenience, but at a cost.

Credit Cards for Bad Credit or to Rebuild Credit: There are credit card companies that offer credit cards to those that may have low credit scores or bad credit.

These credit cards offer all the same conveniences and privilege of use, but they may carry a higher than usual interest rate, and a lower credit limit.

Balance Transfers

In discussing credit cards, their advantages and convenience, and all that is the plastic wonders, one must look at balance transfers.

Transferring a balance on one credit card to another can be a good money, and personal finances management tool as a way to save money.

An example may be that you have a credit card with a current balance of £3,000, and the interest rate, or APR, on this particular credit card is 19%.

This means that if the minimum monthly payment is 3% of the balance, you need to pay at least £90 a month as a payment, and by doing this, it will take you years to pay off the account.

If you were offered a credit card with a zero percent interest rate for 12 months, and a 5% balance transfer fee, you could transfer the balance of £3,000 to this account, which would then have a balance of £3,150, and while there is no interest for 12 months, if you were to pay the same £90 a month payment, after 12 months of payments the balance would be £1,920, as your 12 payments of £90, totalling £1,080 were applied to the principal balance of the account and no interest was charged.

If you could pay more than the previous minimum payment of £90, you could pay of the account, and be debt free.

Transferring balances on credit cards is a way not only to save money that you may be paying in interest, but also a way to pay off the card and be out of debt.

FAQs about Credit Cards

Do I need a credit card?

That is a question only you yourself can answer. Not everyone may feel the need to have a credit card, however, if you travel, or make online purchases, you may find the convenience and the additional warranties and rights a credit card extends to be useful.

I have had bad credit in the past, will I get approved for a credit card?

Loanable works with many different credit card companies, and there are credit card issuers who work with those who have had credit issues in the past. It may be you are approved for a credit card, but with initially a lower credit limit, and higher interest rate. It is possible to be approved for a credit card even with no credit or poor credit.

What can I buy using a credit card?

Almost anything. Any retailer, shop, store, or online seller that accepts credit cards, you can use your credit card to make a purchase. That is one of the conveniences of having a credit card, the number of places you can use it.

What if I have a credit card and don't use it, are there any fees?

That will depend on the card issuer, however, the majority of credit card companies do not charge any fees for not using the card.

Does using a credit card improve my credit rating and credit score?

It can, yes. If you charge purchases to your credit card and maintain a good payment standing and/or pay off the balance, and it is reported to the credit bureaus, this can help to improve your credit rating and credit score. The opposite is true as well. If you fail to make payments as agreed, or reach your maximum credit limit, this can lower your credit rating and credit score.

Can I have more than 1 credit card?

Yes, you can have as many credit cards as you can be approved for, however you need to keep in mind having too many open accounts can hurt your credit score. In addition, the more credit cards you have, the more you may be tempted to use them, which again could lead to being overextended.

What happens if I miss a payment on my credit card?

Missing payments can affect your credit history and your credit score. If for some reason you cannot pay the minimum monthly payment, you should contact your credit card company and explain this to them, and see what options they may have. You could be charged a late fee, and also additional interest.

What is an APR?

APR stands for annual percentage rate, and is the interest that is charged on your account spread out over an annual or yearly time frame. APR’s can change if they are a variable APR, fixed rate cards or fixed APR’s do not change. Is there one credit card that is better than another? The major credit cards such as Visa or MasterCard are equal in stature, and are accepted just about anywhere in the world. Some credit cards such as American Express or Diners Club, are aimed more at business people and those that travel more, however, they are not considered better or worse than any other major credit card.

What is a grace period?

A “grace period” is a period of time between when your payment is due, and when it is reported as late. If your card issuer has a 7 day grace period and your payment due date is the 1st of the month, the payment is not reported late until the 8th of the month. Not all credit card companies offer a grace period, and you should strive to have your payments paid by the due date and not rely on a grace period should there be one.

My credit card has an annual fee to be paid. Do I have to pay this?

If your credit card has an annual fee attached to it, then on the anniversary of the account, the card issuer will charge that fee to the credit card. Even if you have a zero balance, you will now have that fee as a balance to be paid. You can discuss this fee with the card issuer to see if they will waive it, if they will not waive it, you may want to consider closing the account if you no longer need the card.

Can I use one credit card to pay another each month, juggle accounts?

Yes, you can do this, but only until your credit limits have been reached, and this is not a good money management tool. This is also called, “robbing or borrowing from Peter to pay Paul”. You are churning money and not paying down any balances, in fact you are just running up additional debt.

If I apply for a lot of credit cards, does this hurt my credit score?

Yes, applying for a lot of credit does lower your credit score. Inquiries or footprints as they are called, show on your credit history, this is when someone views your credit report. Too many of thee can lower your credit score. You need to be prudent in when you apply for credit.

Can I get a credit card that gives me air miles?

Yes, there are credit cards that offer frequent flier miles or give points or “air miles” when you use them. You will need to research this, and you may also wish to inquire with any specific airlines that you fly on a regular basis to see if they have partnered with any credit card companies.

How do I know if I'll be approved for a credit card if I apply for one?

Some credit card companies have eligibility checkers, which allow you you to find out the probability of being approved for a credit card, without having an inquiry on your credit history. Instead of just rejecting your application, some credit card companies may issue a credit card with certain conditions, such as a lower credit limit, or higher interest rate than what you applied for.

If I take out a new credit card, should I close my old credit card account?

If your old credit card account is one of your first lines of credit, and shows you have been in the credit bureaus for years, then no, you would not want to close it. How long you have been active with credit and in the credit bureaus is one factor used to create your credit score. If you were to close an old account, it could lower your credit score.

I have been approved for a new credit card with a low interest rate, should I transfer a balance from my other credit cards to this one?

Balance transfers from one credit card to another can be a good way to pay off the balance and save money on interest. If the credit limit on the new card is high enough to carry the balance(s) you wish to transfer, and you can pay more than just the minimum payment to pay down the balance, a balance transfer may be a good way to pay down the amount(s) you owe.

I have bad credit and need a credit card for work, how does a secured or pre-paid credit card work?

Pre-paid or secured credit cards are just like normal credit cards, they have a credit limit, interest that is charged, and monthly payments, however, the difference is that the credit limit is set by the amount of money you initially pay towards the account. Think of it as a deposit of money. If you pay £1,000 to the account, you have a £1,000 credit limit. You use the credit card to make purchases, and pay the payments each month, or pay back the balance in full. It is your deposit of £1,000 that has secured the card. If you fail to make a payment, or default on the card, it is your money that is used that secured the card. There can be fees involved with pre-paid or secured credit card as well. These fees you would pay when you make payments, or be deducted from the deposit you gave to secure the card.