When you arrive in the UK you will quickly notice just how often you see people paying for things with a credit card.

Whereas many countries around the world still favour cash as the best way of buying goods and services, the British have embraced the concept of plastic like few other countries, and can now even be seen paying for small items such as coffee or newspapers with these little plastic cards

.

This ‘love affair’ began over 10 years ago, as more and more Brits began to favour the convenience of using a credit card for all their purchases; then paying off what they owed at the end of each month (when most people in the UK get paid)

Caution

This can lead to obvious problems unless you are responsible and manage your money well. Spending more than you can afford to pay back each month means that you will steadily increase your debt to the credit card company, and you will quickly find yourself in serious financial trouble.

The problem for many people is that they find it hard to resist the temptation of buying something they cannot afford when they are out shopping. Unfortunately more and more people in the UK are falling into debt because they cannot say no that new MP3 player or pair of designer shoes.

A modern necessity

But having a credit card is an important part of life in the UK, and you will probably find that the longer you stay in the country the harder it becomes to operate without one. You will soon discover that booking hotel rooms and hire cars, or buying concert tickets or flights, is really quite difficult because of the way that the whole country is organised around credit card transactions.

Therefore it is up to you to make sure that you manage your money well and don’t succumb to temptation. Remember that credit card companies love people who do not manage their finances well, because these are the people who make then the most money.

Choosing the right one

Firstly you should decide what type of credit card you need; there are 100s of different ones out there and they do not all work in the same way.

Remember that a typical credit card will give you between 56 and 59 days from when you buy something until they begin charging you interest, so aim to pay off everything you’ve spent before then.

Rates of interest vary from card to card, but if you are paying off your bill in full each month then you might find that it makes better financial sense to choose a card that offers you a loyalty bonus, such as Air-miles that you can use to pay for flights home each year, rather than just picking the card with the lowest rate of interest.

If you are considered a high earner then you might be offered a ‘status’ card such as a gold, platinum or black credit card. These typically allow you access to large amounts of credit and also give you free extras, such as free travel insurance for example.

These cards used to impress people as they were only given to the very wealthy, however nowadays they are a much more common sight and do not have the same ‘James Bond factor’ that they did back in the 1980s.

Charges

Remember, charges are the same thing as throwing your money away. Avoid them and you will avoid unwanted debt and an annoying new best friend called Mr Plastic.

You will be charged a penalty for missing your monthly payment deadline, but you can avoid this by setting up a direct debit with your bank so that you don’t have to remember every month to do it yourself.

Do not withdraw cash from an ATM machine with your credit card unless it is an emergency. If you do you will be charged between 2-3%; a complete waste of your cash.

Going abroad? Check with your credit card company to see if they charge you for using their card in a foreign country. Many do not charge you so perhaps have one of these just for foreign travel.

So if you set your spending rules and stick to them, and can withstand the temptation of having something today that you know you can’t really afford to pay for tomorrow, then having a credit card will be a useful and convenient financial tool during your time in the UK. Have a look in our “Find a…” section for more information.

By John Hillman

To be listed here click

USEFUL WORDS

plastic = a slang word for a credit card
card holder = the person who the card belongs to
transaction = the act of buying something with a credit card
enter your PIN = enter your Personal Identification Number
signature = your name as you usually write it
card number
expiry date = the date after which the card is no longer valid/cannot be used
CSV code = a 3 digit (number) security code found on the back of a credit card
owe money = to have to pay someone for something that you already have
pay off = to finish paying money owed for something
manage your money
debt = a sum of money that somebody owes
interest = the extra that you pay back when you borrow money
payment deadline = a point in time by which money must be paid
ATM machine / cash point / cash machine / cash dispenser / hole in the wall = a machine in or outside a bank from which you can get money from your bank account using a plastic card

ENGLISH GRAMMAR

Plenty of / too many / too much

Plenty of means ‘enough’ or ‘more than enough’.  Use it with a plural or uncountable noun:
There are plenty of cash points in town
There’s no need to hurry.  We’ve got plenty of time before the bank closes

Use too many or too much to express ‘more than enough’ when this is a bad thing:
I always spend too much money on my credit card
There are too many credit card companies out there with high interest rates