Visa and Mastercards Online

Secured and unsecured credit cards for UK residents to compare and apply for online

There are all kinds of cards out there, many with low introductory rates and other perks. Many urge you to accept "before the offer expires." Before you accept, shop around to get the best deal.

Credit Card Terms

A credit card represents a loan and the credit offered under that loan is charged for. So it's wise to compare terms and fees before you agree to open a credit or charge card account. The following are some important terms you should be told about when applying, and again, as you receive accounts from the credit card provider.

Annual Percentage Rate.

The APR is a measure of the yearly cost of credit. It must be disclosed to you the on your account statements.

The card issuer also must disclose the "periodic rate" - the rate applied to your outstanding balance to figure the finance charge for each billing period.

Some credit card plans allow the issuer to change your APR when interest rates or other economic indicators - called indexes - change. Because the rate change is linked to the index's performance, these plans are called "variable rate" programs.

Rate changes raise or lower the finance charge on your account. If you're considering a variable rate card, the issuer must also provide various information that discloses to you: * that the rate may change; and * how the rate is determined - which index is used and what additional amount, the "margin," is added to determine your new rate.

At the latest, you also must receive information, before you become obligated on the account, about any limitations on how much and how often your rate may change.

Interest Free Period

Also called a "grace period," an interest free period lets you avoid finance charges by paying your balance in full before the due date. Knowing whether a card gives you a free period is especially important if you plan to pay your account in full each month.

Without a free period, the card issuer may impose a finance charge from the date you use your card or from the date each transaction is posted to your account. If your card includes a free period, the issuer must mail your bill at least 14 days before the due date so you'll have enough time to pay.

Annual Fees

Most issuers charge annual membership or participation fees. They often range from £25 to £50, sometimes up to £100; "gold" or "platinum" cards often charge up to £75 and sometimes up to several hundred dollars. Some credit card providers are now offering deals with no annual fees in order to gain customers

Transaction Fees and other charges, zero interest balance transfer charges

A card may include other costs. Some issuers charge a fee if you use the card to get a cash advance, make a late payment, or exceed your credit limit. Some charge a monthly fee whether or not you use the card. Again, in order to attract customers, many providers are now offering to charge no interest on card balances transferred from their competitors.

Balance Computation Method

If you don't have a free period, or if you expect to pay for purchases over time, it's important to know what method the issuer uses to calculate your finance charge. This can make a big difference in how much of a finance charge you'll pay - even if the APR and your buying patterns remain relatively constant.

Average Daily Balance

This is the most common calculation method. It credits your account from the day payment is received by the issuer. To figure the balance due, the issuer totals the beginning balance for each day in the billing period and subtracts any credits made to your account that day. While new purchases may or may not be added to the balance, depending on your plan, cash advances typically are included. The resulting daily balances are added for the billing cycle. The total is then divided by the number of days in the billing period to get the "average daily balance."

Adjusted Balance

This is usually the most advantageous method for card holders. Your balance is determined by subtracting payments or credits received during the current billing period from the balance at the end of the previous billing period. Purchases made during the billing period aren't included. This method gives you until the end of the billing cycle to pay a portion of your balance to avoid the interest charges on that amount. Some creditors exclude prior, unpaid finance charges from the previous balance.

Previous Balance

This is the amount you owed at the end of the previous billing period. Payments, credits and new purchases during the current billing period are not included. Some creditors also exclude unpaid finance charges. If you don't understand how your balance is calculated, ask your card issuer. An explanation must also appear on your billing statements.

Other Costs and Features

Credit terms vary among issuers. When shopping for a card, think about how you plan to use it. If you expect to pay your bills in full each month, the annual fee and other charges may be more important than the periodic rate and the APR, if there is a grace period for purchases. However, if you use the cash advance feature, many cards do not permit a grace period for the amounts due - even if they have a grace period for purchases.

So, it may still be wise to consider the APR and balance computation method. Also, if you plan to pay for purchases over time, the APR and the balance computation method are definitely major considerations.

You'll probably also want to consider if the credit limit is high enough, how widely the card is accepted, and the plan's services and features.

For example, you may be interested in "affinity cards" - all-purpose credit cards sponsored by professional organizations, college alumni associations and some members of the travel industry.

An affinity card issuer often donates a portion of the annual fees or charges to the sponsoring organization, or qualifies you for free travel or other bonuses.

Special Delinquency Rates

Some cards with low rates for on-time payments apply a very high APR if you are late a certain number of times in any specified time period. These rates sometimes exceed 20 percent.

Cardholder Protections

In the UK, liability for misrepresentation and for breach of contract in any credit card transaction between £100 and £30,000 is borne by the retailer and the credit card issuer.

Prompt Credit for Payment

An issuer must credit your account the day payment is received. The exceptions are if the payment is not made according to the creditor's requirements, or the delay in crediting your account won't result in a charge. To help avoid finance charges, follow the issuer's mailing instructions. Payments sent to the wrong address could delay crediting your account for up to five days. If you misplace your payment envelope, look for the payment address on your billing statement or call the issuer.

Errors on Your Bill

Issuers must follow rules for promptly correcting billing errors. You'll get a statement outlining these rules when you open an account and at least once a year. In fact, many issuers include a summary of these rights on your bills. If you find a mistake on your bill, you can dispute the charge and withhold payment on that amount while the charge is being investigated.

Unauthorised Charges

If your card is used without your permission, you can be held responsible for up to £50 per card. If you report the loss before the card is used, you can't be held responsible for any unauthorised charges. If a thief uses your card before you report it missing, the most you'll owe for unauthorised charges is £50. To minimize your liability, report the loss as soon as possible.

Insurance

If a credit card is stolen without you knowing it, say as the result of a burglary, things can get sticky. Cover yourself by checking out UK Online household insurances and get yourself some protection.