Recent research from moneysupermarket.com found that one in five of us carry more than three credit cards and that 17% of credit card holders use their card at least once a day, with a further 28% using their card at least once a week. So which card is best for you?
When choosing a credit card it's always important to think about how you will use it, as different cards offer different benefits depending on your credit needs. Research from moneysupermarket.com shows that some consumers are more savvy than others when it comes to making their plastic work for them – 25% use their card specifically for the reward points, and 11% use their card for cashback and 0% purchases.
Those of you who are able to pay off their balance in full each month are likely to benefit the most from a reward card, otherwise the benefits could be outweighed by interest charges. For those of you who find it harder to do this, a zero per cent purchase card may offer a more suitable and beneficial proposition.
And if you have a good credit rating, there is good news – you now have a greater choice of plastic than you did previously. In the last year the number of cards charging no interest on new purchases for at least 10 months has increased by 450%, according to Moneyfacts. In the same period, the number of cards offering 0% on balance transfers for at least 10 months has increased by 20%.
Travelling with cards
If you travel a lot on business or have property overseas you should definitely consider the various rates credit card companies charge on overseas usage as they vary widely. This is increasingly important as the reliance on credit cards is even greater amongst those of you who travel.
A third of Brits now use a credit card whilst they are abroad: 10 million will use their card for shopping, 9 million for eating out, almost 8 million for unexpected expenses, 7 million for their accommodation costs and 3 million will use their credit card to withdraw cash.
This is not surprising. Research shows that those consumers who are using credit cards abroad do so for the protection they provide. Just under half prefer not to carry large amounts of cash around and a quarter use them specifically for the added security they provide, such as protection against fraud, the safeguards offered under Section 75 laws, the ability to replace stolen or lost cards without any hassle and the peace of mind that comes from knowing that you have access to funds to cover any unexpected expenses.
In fact, to coincide with the approach of the holiday season, The UK Cards Association and ABTA, the travel association, published a consumer advice guide – Using your card overseas – that provides the latest tips and useful information for holidaymakers and business travellers who are planning to use their cards abroad this summer.
They recommend the following to help ensure that using your cards is a hassle-free experience:
• Only take cards with you that you intend to use; leave others in a secure place at home.
• Make sure you have your card company's 24-hour contact telephone number.
• Make sure your card company has up-to-date contact details for you, including a mobile telephone number.
• If your cards are registered with a card protection agency, ensure you have their contact telephone number and your policy number with you.
• Don't let your card out of your sight, especially when using it in restaurants and bars.
• Don't give your PIN to anyone – even if they claim to be from the police or your card company.
• Shield your PIN with your free hand when typing it into a keypad in a shop or at a cash machine.
Credit cards have become an indispensable part of life, especially if you travel – as those recently stranded by volcanic activity can probably testify. But whether you travel a lot or use them as part of your day-to-day dealings, make sure you look at the benefits of your cards and the rates charged. Make your credit cards work for you rather than the other way round.
