A brief Guide to Credit Cards

Credit cards are an easy way of borrowing money to pay for products and services, with the promise to pay back your card provider at a future date. You get a credit limit set by your card provider, which is in place to ensure that you are only borrowing up to the maximum amount you can afford. Your credit limit is usually calculated based on your credit score and the affordability checks that are made at the time of the application.

Applying for a credit card, similar to online loans, is a straightforward process. You can get a decision straightaway and if you’re approved, you can often have your credit card within a week. There are many different credit card providers but most will have basic requirements in place that you’ll need to take note of before you apply:

Have a regular part-time or full-time income

You don’t need to be the highest earner to get a credit card but your card provider does need to know that you’ll have money coming into your current account consistently, which will enable you to repay the money you borrow on your credit card.


Most credit card providers require you to be over 18 before they will consider you for a credit card. You’ve finished school by this time and are hopefully a little more responsible with your cash than you were when you got your first Saturday job – makes sense!

Address Details

You’ll need to share your current address and any other places that you’ve lived in full time over the last 3 to 5 years. This is just so that your provider can check that you are who you say you are and so they know where to send your new card (if you’re approved!).

Bankruptcy, IVAs and CCJs

This will be a unique requirement for each provider but generally, you’ll have a better chance of approval if you’ve not entered an IVA, bankruptcy or had any CCJs within the last 6 years. However, even if you have had any of the above within the last 6 years, it doesn’t completely exclude you from being able to apply for a credit card.

What are the Costs of using a Credit Card

The typical APR charged on credit cards is around 19% but this will vary depending on your card provider, and if you are paying your balance in full each month or just making minimum payments. If you are paying your balance in full each month, you won’t be charged any interest.

Some credit providers offer a 0% introductory rate to new customers for a set period, which can be incredibly helpful as this means you won’t pay any interest on the money you borrow during the introductory period – even if you are only making the minimum monthly repayments. Remember that you do need to make at least the minimum repayment each month though, as this is often a criteria of keeping the 0% interest rate.

Note: Late payments or non-payments can result in late fees being added to your balance for every month it remains unpaid, so it’s usually advisable to avoid making late payments at all costs.

What Are The Best Ways To Use a Credit Card

  • Pay the full balance each month as often as you can
  • Always make your payments on time
  • Don’t use your credit card for withdrawing cash – there can be hefty charges for this!
  • Check fees before using your credit card abroad
  • Know your credit limit and spend within your limit
  • If your credit card comes with cashback or rewards, make the most of them
  • Check your statement each month to ensure all payments were authorised by you

Are Credit Cards Good For My Credit Score?

One of the most important factors that contribute to a good credit score is making your repayments in a timely manner - so when used responsibly, a credit card can be a good way to boost your credit score by showing that you are a responsible borrower. Making repayments on time? Never missing payments? Keeping spending within your limits and never going over it? Lenders notice this and a better credit score is one way you can be rewarded.

Note: It’s great if you’re making the minimum monthly payment towards your balance, but even better if you’re repaying the full balance on time each month.

Remember, your providers are human too and they recognise that sometimes your circumstances can suddenly change, making repaying on time difficult. If you find yourself struggling to make timely payments towards your balance, get in touch with your provider as soon as you can so that they can assist you.


Whilst a credit card is in many ways a convenient way of spreading the cost of larger purchases, you may find it difficult to make timely repayments if spending is not controlled. Remember to assess your need for credit before you make any purchases and make sure you can afford to borrow to avoid finding yourself in a sticky situation.

If you’re still not sure about getting a credit card, you could look at alternative forms of credit like credit lines or short term loans. Always make sure that you are getting the best product for your circumstances by using a handy loan comparison website, because as they say, knowledge is power..

The Bear Necessities

All you need to know about short term loans

The Bear Says…

The best saving tips, budget ideas and ways to improve your financial health