Credit Cards - Do They Deserve the Bad Press?

by : Nick Cox

Credit cards have received plenty of negative press of late. But surprisingly, if used wisely, a credit card can provide a range of flexible and useful benefits for the cardholder.

With all the bad press, it's easy for these advantages to be overlooked. Let's take a look at some of the benefits to be had when using credit cards.

Know your rights
Surprisingly, you have more consumer rights when you spend via a credit card than you do when using debit cards, cash or cheque. Keep in mind that to get the benefit of these extra rights, without any interest costs, you will have to pay off the required amount on your credit card each month.

These extra rights are all thanks to Section 75 of the Consumer Credit Act 1974.
If you buy anything costing over ?100, and provided a part of that amount is paid on the credit card, then an equal claim can be made against the card issuer as against the retailer. This means that in the event of, for example, goods not being delivered, you can make a claim with the credit card company instead of the retailer. This includes products purchased abroad.

Cash Back
Certain credit cards provide a cash back deal, whereby a percentage of the funds you have spent on the card are credited back to your account. These are only worth considering if you always pay off your entire credit card bill at the end of the month. If you don't, then all your cash back gains will be wiped off against the amount of interest you will pay.

0% Balance Transfers
Most balance transfer cards require that you have a good credit history. If your credit history is up to scratch then you can take advantage of 0% credit cards. Simply pay off your current credit card balance with your new 0% credit card; you then have the same balance to pay but minus the interest for the year.