{"id":26971,"date":"2022-12-20T11:25:20","date_gmt":"2022-12-20T10:25:20","guid":{"rendered":"https:\/\/www.lendingstream.co.uk\/blog\/?p=26971"},"modified":"2023-08-09T08:23:56","modified_gmt":"2023-08-09T08:23:56","slug":"how-do-credit-cards-work","status":"publish","type":"post","link":"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/","title":{"rendered":"How Do Credit Cards Work in the UK? Learn More Here"},"content":{"rendered":"\n<p>Credit cards are one of the most popular ways to borrow money in the UK. <strong>As of January 2022, there were almost 60 million credit cards issued to UK residents<\/strong>. Lots of people have more than one card in their wallet or purse. <strong>But do you know how credit cards work?<\/strong><\/p>\n\n\n\n<p>Simply put, a credit card is a physical card that you use to pay for things. The money comes from the credit card provider who you have to pay back.<\/p>\n\n\n\n<p>But if you live in the UK and you want a better understanding of how credit cards work, read on. We\u2019ve got the answers to your questions, and we\u2019ll give you tips on how to use them safely and responsibly.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69f285400a3a4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69f285400a3a4\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#what_is_a_credit_card\" >What is a Credit Card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#what_is_the_difference_between_a_debit_card_and_a_credit_card\" >What is the Difference Between a Debit Card and a Credit Card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#what_different_types_of_credit_cards_are_available_in_uk\" >What Different Types of Credit Cards are Available in UK?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#1_balance_transfer_credit_cards\" >1. Balance Transfer Credit Cards<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#2_rewards_credit_cards\" >2. Rewards Credit Cards<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#3_credit_cards_for_bad_credit\" >3. Credit Cards for Bad Credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#4_travel_credit_cards\" >4. Travel Credit Cards<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#5_credit_builder_cards\" >5. Credit Builder Cards<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#6_interest_free_purchase_credit_cards\" >6. Interest Free Purchase Credit Cards<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#which_credit_card_is_best_for_me\" >Which credit card is best for me?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#what_are_the_pros_and_cons_of_credit_cards\" >What are the Pros and Cons of Credit Cards<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#what_information_do_i_need_to_apply_for_a_credit_card\" >What Information do I Need to Apply for a Credit Card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#how_can_i_apply_for_a_credit_card\" >How Can I Apply for a Credit Card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#what_things_should_i_consider_before_applying_for_a_credit_card\" >What Things Should I Consider Before Applying for a Credit Card?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#1_annual_percentage_rate_apr\" >1. Annual Percentage Rate (APR)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#2_fees_of_the_credit_card\" >2. Fees of the Credit Card<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#3_can_you_control_your_spending\" >3. Can You Control Your Spending?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#how_much_can_i_spend_using_a_credit_card\" >How Much Can I Spend Using a Credit Card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#what_charges_will_i_face_using_my_credit_card\" >What Charges Will I Face Using My Credit Card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#faqs_about_credit_cards_in_the_uk\" >FAQs about Credit Cards in the UK<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#how_much_credit_i_can_get_on_my_credit_card\" >How Much Credit I Can Get on My Credit Card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#can_i_withdraw_cash_from_my_credit_card\" >Can I Withdraw Cash from My Credit Card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#can_i_use_my_credit_card_abroad\" >Can I Use My Credit Card Abroad?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#what_is_the_minimum_payment_on_a_credit_card\" >What is the Minimum Payment on a Credit Card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#what_happens_if_i_dont_pay_my_credit_card_bill\" >What Happens if I Don&#8217;t Pay My Credit Card Bill?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-do-credit-cards-work\/#how_can_i_cancel_my_credit_card\" >How Can I Cancel My Credit Card?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"what-is-a-credit-card\"><span class=\"ez-toc-section\" id=\"what_is_a_credit_card\"><\/span><strong>What is a Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>In simple terms, a credit card is a payment card that you can use to buy almost anything. <\/strong>When you take out a credit card, you\u2019re given a credit limit. You can spend up to your credit limit but then you have to pay the money back. If you pay back everything you\u2019ve spent, the money is there for you to spend again. This is known as revolving credit.<\/p>\n\n\n\n<p>If you don\u2019t pay back the money you spend when payment it\u2019s due, the balance you owe will remain on the account. This outstanding balance will have interest added to it until it\u2019s paid off.<\/p>\n\n\n\n<p>You can pay back as much you want each month. But you\u2019ll be expected to repay a minimum amount each month. The more you pay back, the less interest you\u2019ll pay.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-is-the-difference-between-a-debit-card-and-a-credit-card\"><span class=\"ez-toc-section\" id=\"what_is_the_difference_between_a_debit_card_and_a_credit_card\"><\/span><strong>What is the Difference Between a Debit Card and a Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Although both cards are payment cards, there are differences between them. The table below lists the main ones.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Debit card<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Credit card<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">It\u2019s a payment card that\u2019s linked to your bank account.<\/td><td class=\"has-text-align-center\" data-align=\"center\">It\u2019s a payment card that\u2019s linked to your credit card account.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">You can only spend the money that you\u2019ve got in your bank account or overdraft.<\/td><td class=\"has-text-align-center\" data-align=\"center\">Your account has a credit limit on it so you can only spend up to that limit.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">You can\u2019t get into debt by spending on your debit card as you\u2019re spending your own money.<\/td><td class=\"has-text-align-center\" data-align=\"center\">If you don\u2019t pay back what you owe each month, your outstanding balance will become a debt that you owe.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">You won\u2019t incur any extra costs by using your debit card in the UK.<\/td><td class=\"has-text-align-center\" data-align=\"center\">Your credit card may have extra costs such as annual fees. You\u2019ll also have to pay interest on any outstanding balance you owe.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-different-types-of-credit-cards-are-available-in-uk\"><span class=\"ez-toc-section\" id=\"what_different_types_of_credit_cards_are_available_in_uk\"><\/span>What Different Types of Credit Cards are Available in UK?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are many different types of credit cards available in the UK, each have their own features and benefits. Let\u2019s take a look at some of the most popular types of credit cards.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"1-balance-transfer-credit-cards\"><span class=\"ez-toc-section\" id=\"1_balance_transfer_credit_cards\"><\/span>1. Balance Transfer Credit Cards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Balance transfer credit cards let you transfer over an outstanding balance from another credit card. The incentive for doing this is that they should offer a 0% introductory APR on the balance you transfer. This would be set for a limited period.<\/p>\n\n\n\n<p>This is a great solution if you\u2019re trying to pay off debt without accruing any interest on your balance. The new credit card provider will charge a fee for transferring the debt over, which they add to your balance.<\/p>\n\n\n\n<p>If you\u2019re going to transfer your balance to a 0% credit card, make sure you work out what the fee is. You don\u2019t want to pay more in transfer fees than what you\u2019d pay in interest if you left the debt where it was.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"2-rewards-credit-cards\"><span class=\"ez-toc-section\" id=\"2_rewards_credit_cards\"><\/span>2. Rewards Credit Cards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Rewards credit cards are a type of credit card that give you something back every time you spend. The rewards can be:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Points that you get to spend on something else. Supermarket credit cards are typical for this type of reward.<\/li>\n\n\n\n<li>Cash back. This is where a small percentage of the money you spend is credited back to you.<\/li>\n\n\n\n<li>Travel miles. These are points that can be exchanged for flights or holidays.<\/li>\n<\/ul>\n\n\n\n<p>These cards can be a great way to earn rewards on everyday purchases. But it&#8217;s important to remember that they may come with higher interest rates and fees. Rewards credit cards may also have annual fees ranging from \u00a30-\u00a3100 or more. As long as you know the terms of use, rewards credit cards can be a great way to earn rewards on your everyday spending.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"3-credit-cards-for-bad-credit\"><span class=\"ez-toc-section\" id=\"3_credit_cards_for_bad_credit\"><\/span>3. Credit Cards for Bad Credit<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If you have bad credit, it can be difficult to qualify for a traditional credit card. But there are credit cards available for people with bad credit in the UK. Their purpose is to help you rebuild your credit score.<\/p>\n\n\n\n<p>These cards tend to have higher interest rates and lower credit limits than regular cards. But they can be a valuable tool for rebuilding your credit history.<\/p>\n\n\n\n<p>If you\u2019re not sure if you\u2019re eligible for one, there are many eligibility checker sites where you can take a look. These sites can help you find out your best chances of getting a credit card.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"4-travel-credit-cards\"><span class=\"ez-toc-section\" id=\"4_travel_credit_cards\"><\/span>4. Travel Credit Cards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Travel credit cards are a great option for those who frequently travel abroad.<\/strong> These cards let you spend money abroad without charging you a fee on each transaction. That\u2019s so long as you don\u2019t use them to draw out cash.<\/p>\n\n\n\n<p>You may find some that offer other perks, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>travel insurance<\/li>\n\n\n\n<li>priority boarding<\/li>\n\n\n\n<li>complimentary lounge access.<\/li>\n<\/ul>\n\n\n\n<p>Remember that they may come with an annual fee so check the terms before you apply.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"5-credit-builder-cards\"><span class=\"ez-toc-section\" id=\"5_credit_builder_cards\"><\/span>5. Credit Builder Cards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The credit builder card is a great choice for people with no credit history or with a poor credit rating. This type of card allows you to build up your credit history by making regular payments.<\/p>\n\n\n\n<p>They\u2019re a good way of improving your credit score but watch out for the interest rates. They tend to be higher than regular credit cards.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"6-interest-free-purchase-credit-cards\"><span class=\"ez-toc-section\" id=\"6_interest_free_purchase_credit_cards\"><\/span>6. Interest Free Purchase Credit Cards<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>This type of credit card offers 0% interest on purchases for a limited period.<\/strong> This is helpful for consumers who need to make a large purchase but don\u2019t want to pay any interest. You just have to make sure you pay it all back within the interest free period.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"which-credit-card-is-best-for-me\"><span class=\"ez-toc-section\" id=\"which_credit_card_is_best_for_me\"><\/span>Which credit card is best for me?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>The best credit card for you will depend on your spending habits and needs.<\/strong> To find out which one\u2019s best for you, ask yourself these questions.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Do I need to pay off debts? If so, a balance transfer credit card is best.<\/li>\n\n\n\n<li>Do I need to make a large purchase? If so, an interest free purchase credit card will be your best option.<\/li>\n\n\n\n<li>Do I have a low credit score? If so, a credit builder card will help.<\/li>\n\n\n\n<li>Do I want rewards for my everyday spending? If so, a rewards credit card will do the trick.<\/li>\n\n\n\n<li>Do I travel a lot? If so, a travel credit card may be a good option for you.<\/li>\n<\/ul>\n\n\n\n<p>Whatever card you choose, make sure you read all the terms, so you know what fees and charges are included.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-are-the-pros-and-cons-of-credit-cards\"><span class=\"ez-toc-section\" id=\"what_are_the_pros_and_cons_of_credit_cards\"><\/span>What are the Pros and Cons of Credit Cards<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are good points and bad points to having a credit card. We\u2019ve listed the main pros and cons in the table below.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Pros of credit cards<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Cons of credit cards<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Convenience<\/strong>: Credit cards are one of the most convenient ways to pay for just about anything. They can be used anywhere that accepts credit card payments.<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Debt<\/strong>: One of the biggest disadvantages of using a credit card is the potential for debt. Credit card debt can be easy to build, difficult to repay and can damage credit scores.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Rewards: <\/strong>Many credit cards offer rewards programs. They give cardholders points, miles, or cash back for purchases.<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Interest Charges: <\/strong>Interest charges can add up over time. Credit card interest rates tend to be much higher than other types of credit.<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Protection<\/strong>: Credit cards offer protection against fraud and theft. If a credit card is lost or stolen, the cardholder isn\u2019t responsible for any fraudulent charges. It also offers protection against purchases under \u2018<strong><a href=\"https:\/\/www.ukfinance.org.uk\/faqs-chargeback-rights-and-section-75-and-coronavirus\" target=\"_blank\" rel=\"noreferrer noopener\">Section 75<\/a><\/strong>\u2019. This means that if you have a problem with a purchase, you can claim for a refund through the credit card company.<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Fees:<\/strong> Credit cards often come with fees such as Annual fees, Late payment fees and Penalty fees.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-information-do-i-need-to-apply-for-a-credit-card\"><span class=\"ez-toc-section\" id=\"what_information_do_i_need_to_apply_for_a_credit_card\"><\/span><strong>What Information do I Need to Apply for a Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>If you want to apply for a credit card in the UK, you\u2019re going to need to provide information about yourself. The information they\u2019ll need is likely to include the following.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Proof of your identity<\/li>\n\n\n\n<li>Proof of your address<\/li>\n\n\n\n<li>Details of your income and employment<\/li>\n\n\n\n<li>If you\u2019re doing a balance transfer, details of the balance you want to transfer.<\/li>\n<\/ul>\n\n\n\n<p>Getting the documents ready before you start the application will make the process more seamless.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-can-i-apply-for-a-credit-card\"><span class=\"ez-toc-section\" id=\"how_can_i_apply_for_a_credit_card\"><\/span><strong>How Can I Apply for a Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Applying for a credit card in the UK is a relatively simple process. Most banks offer credit cards,<\/p>\n\n\n\n<p>as well as other lenders.<\/p>\n\n\n\n<p>Most of them have an online application process that make it straight forward to apply. <strong>Here are the steps you need to follow<\/strong>:<\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\">\n<li>The first step is to make sure that you\u2019re eligible for a credit card. <strong>This would include:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Being a resident of the UK<\/li>\n\n\n\n<li>Having a good credit history<\/li>\n\n\n\n<li>Having a regular income<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>If you meet these criteria, then you can start the application process by filling out an online form. Make sure you\u2019ve got all the information and documents you need on hand.<\/li>\n\n\n\n<li>Once you\u2019ve submitted your application, you should receive a decision within a few days. Many lenders will give you a decision instantly.<\/li>\n\n\n\n<li>If you\u2019re approved for a credit card, it\u2019ll be sent to you through the post. This can take up to 7-10 days.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-things-should-i-consider-before-applying-for-a-credit-card\"><span class=\"ez-toc-section\" id=\"what_things_should_i_consider_before_applying_for_a_credit_card\"><\/span><strong>What Things Should I Consider Before Applying for a Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Below are a few key factors that you should consider before applying for a credit card.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"1-annual-percentage-rate-apr\"><span class=\"ez-toc-section\" id=\"1_annual_percentage_rate_apr\"><\/span><strong>1. Annual Percentage Rate (APR)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One of the most important things to look at when applying for a credit card is the APR. This is the amount of interest that will be charged on any outstanding balances on your credit card. The higher the rate, the more it\u2019ll cost you.<\/p>\n\n\n\n<p>The only way to avoid paying interest is by paying off your balance in full every month. If you can\u2019t do this, then the APR will have a big impact on how much your credit card will cost you over time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"2-fees-of-the-credit-card\"><span class=\"ez-toc-section\" id=\"2_fees_of_the_credit_card\"><\/span><strong>2. Fees of the Credit Card<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Many cards have annual fees, late payment fees, and balance transfer fees. Make sure that you understand all the fees before you apply for the card. Otherwise, you could find that borrowing money on your credit card becomes expensive.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"3-can-you-control-your-spending\"><span class=\"ez-toc-section\" id=\"3_can_you_control_your_spending\"><\/span><strong>3. Can You Control Your Spending?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Credit cards can make spending easy. They could make it easier to make impulsive purchases. Use your card wisely, if you let your spending get out of control you could end up in a lot of debt.<\/p>\n\n\n\n<p>A good way to control this is to leave your credit card at home when you go out. Use it just for the purpose you took the card out. For example, if you wanted it to transfer a balance and pay less interest, don\u2019t use it for anything else. Each time you go to spend on it, remind yourself that the money\u2019s not yours, you have to pay it back.<\/p>\n\n\n\n<p>If you struggle to control your spending, think twice about taking out a credit card.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how-much-can-i-spend-using-a-credit-card\"><span class=\"ez-toc-section\" id=\"how_much_can_i_spend_using_a_credit_card\"><\/span><strong>How Much Can I Spend Using a Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The amount you can spend on your credit card is limited by the card provider. Depending on the card, your credit limit can be a few thousand pounds or more. But that doesn&#8217;t mean you should max out your card every month. In fact, doing so can damage your credit score and make it harder to get approved for new credit in the future.<\/p>\n\n\n\n<p>If you can\u2019t clear what you owe each month, aim to keep your balance below 30% of your credit limit. That way, you&#8217;ll avoid paying too much interest and are less likely to <a href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/\"><strong>harm your credit score<\/strong><\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-charges-will-i-face-using-my-credit-card\"><span class=\"ez-toc-section\" id=\"what_charges_will_i_face_using_my_credit_card\"><\/span><strong>What Charges Will I Face Using My Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Depending on how you use your credit card, you may face the following charges.<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\">\n<li>Most credit cards will charge a transaction fee for any purchases made in a foreign currency. If you buy foreign currency with your credit card, it\u2019ll be charged as a cash withdrawal.<\/li>\n\n\n\n<li>If your credit card doesn\u2019t have an interest free period for purchases, you&#8217;ll be charged interest on purchases you make. The interest rate will be applied to any balance you carry over from month to month. The amount of interest will depend on the card provider. But it\u2019s usually not cheap.<\/li>\n\n\n\n<li>Most credit cards will charge you a fee for using it to withdraw cash. As you can pay for most things with a credit card, it\u2019s better to avoid using it to draw out cash<\/li>\n<\/ol>\n\n\n\n<p>Before you use your credit card abroad or in the UK, check what the charges are with your card provider.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"faqs-about-credit-cards-in-the-uk\"><span class=\"ez-toc-section\" id=\"faqs_about_credit_cards_in_the_uk\"><\/span><strong>FAQs about Credit Cards in the UK<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1671479506215\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"how_much_credit_i_can_get_on_my_credit_card\"><\/span><strong>How Much Credit I Can Get on My Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The credit limit you get on your credit card will depend on the card provider and the type of card you have. For example, some cards may offer a low credit limit with no annual fee. Others may offer a higher credit limit and rewards, but they\u2019ll come with an annual fee.<br \/>The credit limit you get will be decided when your card application is approved. Over time, if you use your card responsibly, the card provider may increase your credit limit. You can choose to accept or reject the increase they offer.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1671479531068\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"can_i_withdraw_cash_from_my_credit_card\"><\/span><strong>Can I Withdraw Cash from My Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, you can withdraw cash from your credit card at a cash machine. But you\u2019ll be charged a cash advance fee, as well as interest on the amount withdrawn.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1671479555668\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"can_i_use_my_credit_card_abroad\"><\/span><strong>Can I Use My Credit Card Abroad?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes, you can use your credit card abroad. But you\u2019ll be charged a foreign transaction fee for each purchase made.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1671479573411\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"what_is_the_minimum_payment_on_a_credit_card\"><\/span><strong>What is the Minimum Payment on a Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The minimum payment on your credit card is the smallest amount you can pay back each month. It\u2019s worked out as a percentage of your outstanding balance. If this percentage amount is below a certain figure, say \u00a35, then your minimum payment will be \u00a35.<br \/>Your card provider will tell you what the minimum payment is on your card. But you must pay this amount, or you\u2019ll be charged a late payment fee.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1671479596787\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"what_happens_if_i_dont_pay_my_credit_card_bill\"><\/span><strong>What Happens if I Don&#8217;t Pay My Credit Card Bill?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>If you don&#8217;t pay your credit card bill, you\u2019ll be charged a late fee. The missed payment will also be reported on your credit file which would impact your credit score.<br \/>If you continue to miss payments, your credit card provider may eventually close your account.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1671479621861\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"how_can_i_cancel_my_credit_card\"><\/span><strong>How Can I Cancel My Credit Card?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>To cancel your credit card, you\u2019ll need to contact your card provider and request that they close your account. Of course, you\u2019ll have to clear your outstanding balance before they can close it. And you\u2019ll have to cut up your credit card so it can no longer be used.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<p><strong>Disclaimer:<\/strong> We are not providing financial advice. These are just tips for informational purposes. Also, we are not affiliated to any of the external parties linked here, they are provided for reference only.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Credit cards are one of the most popular ways to borrow money in the UK. As of January 2022, there were almost 60 million credit cards issued to UK residents. Lots of people have more than one card in their wallet or purse. But do you know how credit cards work? Simply put, a credit [&hellip;]<\/p>\n","protected":false},"author":48,"featured_media":26973,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[267],"tags":[],"class_list":["post-26971","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loans"],"_links":{"self":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/26971"}],"collection":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/users\/48"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=26971"}],"version-history":[{"count":2,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/26971\/revisions"}],"predecessor-version":[{"id":26974,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/26971\/revisions\/26974"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/media\/26973"}],"wp:attachment":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=26971"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=26971"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=26971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}