Uses a Credit Card

Benefits of Credit Cards

Credit & Debit Cards

From convenience to security and efficiency, Credit Cards promise several advantages:

• Credit cards are often cheaper than loans for short-term borrowing. You pay interest on the remaining debt, not the full amount - and there are no early redemption penalties.
• Credit cards offer flexibility to match uneven income and expenditure patterns: you choose what to pay off each month, between the minimum and the total outstanding.
• Their consolidated accounting enables one cheque to settle multiple transactions – while all appear neatly on one pre-prepared statement each month.
• There is an automatic ‘interest free’ period (up to 56 days) per statement period.
• Credit cards enable remote purchasing via the internet, by telephone or mail order.
• Credit cards can include additional benefits like insurance cover on purchases, cash-back, AirMiles, Nectar or Reward points, and holiday discounts.         

Dangers of Credit Cards

Credit cards can also be unnecessarily costly and even dangerous:

Credit cards may be expensive for cash withdrawals and foreign currency purchases.

Their credit limits can be insufficient for your wants of needs.

Their persuasive advertising encourages a ‘pay now, worry later’ mentality and make it too easy to get into debt.

Credit cards are very open to fraudulent use.

Credit Card Fraud

As more and more people use plastic as their main means of paying for goods and services, so there are more opportunities for criminals to cash in. Credit card fraud is, sadly, not a new phenomenon and new types of fraud, such as 'skimming', where the data from a card's magnetic strip is copied onto another card, are becoming increasingly widespread and problematical. With credit card losses topping £411.4 million in 2001, surveys show that over half the people in the UK are worried about having their credit or debit cards stolen.

Card Watch is the UK banking industry's body that works with police, retailers and organisations including Crimestoppers to fight plastic card fraud. Card Watch is run under the Association for Payment Clearing Services (APACS), the banking industry body that oversees money transmission and payment clearing activities in the UK.

Credit Card Security

It’s always much better to prevent your cards from being stolen or misused in the first place, than having to sort out the ensuing mess afterwards.  Here are 10 tips to help…

1. Keep an eagle eye on your card when using it in shops and restaurants, especially abroad. If an embossing machine is used, ask for and destroy the carbon copies.
2. Never discard transaction slips that display your entire card number.
3. Never leave cards where their details can be copied or memorised by a fraudster.
4. Always check your transaction slips at the time of purchase and, if possible,  query any discrepancies with the retailer before leaving their premises.
5. Never write your PIN number down or disclose it to anyone else.
6. Always ask the merchant to confirm the amount being debited, INCLUDING any booking and / or delivery charges.
7. Carefully check your credit card statement against the relevant transaction slips accumulated each month – and watch out for human errors like mistakenly transposing two or more digits on manually entered transactions.
8. If you use a card to buy products or services over the internet, make sure it’s one that guarantees reimbursal for any fraudulent use subsequent to your transaction.
9. Do not buy products or services from websites that do not use a secure server to process credit card payments. These are denoted by a small, closed padlock icon.

Never give your card details to a telephone ‘cold-caller’, even if they claim to be from a highly reputable company.