Plastic purchases overtook cash for the very first time in 2005. Will we soon be living in a society that is completely cashless, where only credit cards are accepted?
Answer: If the companies are in charge, then the answer would be a clear yes. The credit card issuers are losing money as the consumers learn more about how to use credit cards. To defend themselves, the companies are trying to profit by encouraging customers to use credit cards more often. Many major credit cards are promoting'small changes', where merchants pay 1-2% to process the transaction. Globally, these ì†Œì•¡ê²°ì œ ì •ì±… are estimated to be worth more than PS20bn.
What does that mean for the consumer? The ease of paying for small purchases is increasing. To entice UK consumers to use credit cards, some offer cashback for any amount of money spent on plastic. Paying with credit cards is easy and convenient. They allow you to keep track of your spending, as well as offer you rewards.
The UK consumer without a card, or who is not eligible for the most popular reward cards will be left with no choice but to pay cash. Many options are available to those who have damaged credit in order to benefit from the safety and convenience of using plastic. If your credit rating is less than stellar, you still have a number of options.
Bad Credit Credit Cards
Many major credit card providers offer so-called "bad credit credit cards". In general they have higher rates of interest than the cards offered to the 'typical customer' with good credit. But as companies compete to get more customers, the limits on these cards are slowly being lowered. Bad credit credit cards can have an APR as low as 12 percent, but they might also come with an annual charge.
Understanding Secured Credit Cards
Secured credit cards are another alternative for consumers with bad credit scores. In order to apply for these cards you must deposit a certain amount in the chosen bank by the card issuer. The money you deposit will be used as security for any purchase that you may make. If you make timely payments, your money isn't accessed. Instead, interest is earned. Add more money to the account and you will be able to increase your limit. As you develop a strong payment history you will receive offers for unsecured cards with lower interest rates.
Stored-Value Cards
Stored value cards are a great option if you don't like to pay with credit but want the convenience and ease of plastic, such as for online payment. These cards look like debit cards but have a credit-card logo. But they are not linked to your accounts. Stored value cards can be loaded at merchants, online, with your bank or credit card. Paying a fee to add money will not result in interest, as you aren't borrowing the money.
On comparison sites, you can compare credit offers. These websites feature dozens of offers and include the most recent credit card deals from the largest companies. There's also information on how to choose the right credit card.
