All you need to know about credit cards
What's a credit card?
Credit cards are payment cards that allow you to borrow money in the form of credit from a credit card provider. Credit card providers, like Capital One, lend money through a credit card so that you can easily pay for products and services, such as in shops, restaurants or online.
You only have a fixed amount available to spend on your card, known as a credit limit. This limit is decided by your credit card provider when you apply for a card, but can be increased later if you prove to be a good customer.
You’ll get a monthly statement that will show you the details of all the things you’ve paid for on your credit card in the past month. It will also include the minimum payment that you owe your credit card provider and the date by which you need to pay it.
Credit cards make your life easier in many ways. They can be used anywhere in the world, both at home and abroad, and are really useful when you don’t want to carry a lot of cash or you want to buy things online.
They also provide a safe and secure way to make payments. So, for example, if there’s a problem with something you’ve purchased, that’s worth over £100, you may be able to make a claim with your credit card provider.
How credit cards can make your life easier
Your credit card can be used:
- Anywhere you see that MasterCard and Visa are accepted
- To pay for things in shops
- To pay for things online
- Contactless credit cards make buying things quick and simple
- To take cash out from an ATM, also known as a cash advance or cash withdrawal
- To transfer over a balance from another credit cardour credit card provider.
Get to know your credit card statement
Your credit card statement shows you all the aspects of your card including what you’ve spent, how much you owe (known as your balance), how much you need to repay, and when your payments are due.
The credit card statement also shows any foreign transactions you might have made abroad, cash withdrawals, balance transfers, monthly interest, and any fees you might owe.
Your statement will tell you what the minimum payment you‘ll need to pay is, and the date when you must pay it. If the balance is not paid off in full each month, you will be charged interest on the amount you’ve borrowed. Details of your interest rates and any fees you may be charged can be found in your credit card agreement.
You can also check your credit card statement online at any time, wherever you are, making it convenient and easy for you to manage your card and stay in control.
Make sure you check your credit card statement every month to find out how much you owe. You must pay at least the minimum amount that appears on the statement, although you will save money on interest and pay your debt off more quickly if you pay more than the minimum. The ideal option is that you pay off the complete outstanding balance in one go. If you can’t afford to pay off the full balance each month you will be charged interest on the full outstanding balance.