Borrowing with a Credit Card
Is a credit card suitable for me?
A credit card gives you the flexibility to make repayments to suit your monthly expenditure. In a month when money may be short and you need to meet other expenses, for example, an unexpected bill, you could pay the minimum payment on your card for the following month.
Before you make purchases on a credit card, always think about whether you can afford at least the minimum payment. We would recommend that you can afford more than the minimum payment. If you can only make the minimum payment each month, you should think about whether a credit card is really suitable for you.
A credit card is not suitable for long term borrowing or financing existing debt. If you are looking to purchase a large item and repay over a longer period of time a personal loan may be more suitable.
A credit card has facilities that make it more flexible than cash and cheques when making purchases. It is a safer way to purchase goods than carrying cash. In today’s world it is almost a necessity to be able to purchase goods online to get the best deals and more conveniently shop around. When travelling, hotels and car hire companies require you have a card to secure a deposit. If you require cash, it is more expensive to take cash out on your credit card and in particular if you use your card abroad, rather than using travellers cheques.
What does a credit card do?
You can use your card anywhere to purchase goods or services whether on the high street or online in the UK or anywhere in the World, wherever the Visa symbol is displayed. You can also use your card in an ATM to take out cash either in the UK or abroad. A credit card allows you to purchase goods or services immediately, provided that you have enough available credit on your card for
the purchase. You will receive statements showing your transactions, fees, charges and any payments. You will have to pay at least the minimum payment by the date which will be shown on your statement.
How long do I have access to the credit?
Provided you meet at least the minimum payment on time each month, and stay within your credit limit, you will have continued access to the credit we provide to you.
We will always reserve the right to decrease your credit limit dependent upon how you use your card and your financial circumstances, including any other credit facilities you may have with other lenders.
We also reserve the right to close your account and if we do this we will always give you at least two months’ written notice. Please refer to the terms and conditions of your account for further information on when or why this might happen.
How much will you lend to me?
When opening your account, credit limits start at £150 and will be no more than £1,000, depending on your credit history, financial circumstances and how you are managing your current credit facilities with other lenders.
Shortly after opening your account, we will write to tell you what your credit limit is. Depending on how you manage your account and credit with other lenders, this amount may change, and we will tell you if it does.
Why do you have more than one interest rate on my account?
We have two rates which apply to your account; one for purchases and one for cash advances and credit card cheques. We appreciate that you will normally only want to use your credit card for purchases and therefore, this is the lower (purchase) rate. Whilst, the card is not predominantly designed as a cash facility, we understand that from time to time you may need extra cash and this is charged at a cash rate which is higher than the rate for purchases.