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If you already have existing credit card debt on one or more cards and want to pay it off at a lower interest rate, then you should consider a balance transfer credit card. These cards allow you to move your debt from your current card(s) to a new one and pay if off at a lower interest rate. Many of these cards also offer 0% interest for several months, though some may charge a small fee to transfer your balance.

If you're planning to make a large purchase such as furniture for your home and can't afford to pay for it in one go, then you should consider a 0% purchase card, or a 0% money transfer card. These offer long interest free periods so you can split the cost into monthly instalments without paying any interest. Make sure to pay at least the minimum payment every month, and pay off the whole balance before the 0% interest period ends, otherwise you'll be charged interest on the remaining balance.

If you have never taken out credit before, or have a low credit score that you want to improve, then you could consider a credit building credit card. These cards are easier to get approved for and typically charge higher interest rates and have low credit limits. They are best used for everyday spending, with the balance being paid off in full every month. If you keep that up for six months or more, you should see your credit score get a boost.

If you want to earn rewards on your spending, there are different kinds of rewards credit cards available depending on what you want. Some cards offer air miles or points that can go towards lowering the cost of your air travel. Other cards offer points that you can collect to earn discounts at the stores you like to shop from. With cashback cards you'll earn cash that your provider may give you directly, either on a monthly or annual basis.

Be aware that rewards cards charge high interest rates and often come with annual fees. So they only make financial sense if you typically pay off your full balance every month, and you earn more in rewards than you pay for the annual fee of the card.

Some credit cards come with an annual fee, which you pay to use the card. This is separate from interest charges on balances. The fee is charged once a year and typically appears as a one-time fee on your credit card statement.

APR stands for “Annual Percentage Rate” and is the total cost of borrowing over 12 months. For example, if your APR is 20%, you will be charged 20p for every £1 borrowed over the course of 12 months. If you pay your balance in full and on time, you will not pay interest.

Your credit card balance is the amount of money you owe your credit card provider. In other words, it's the amount you borrowed using your credit card to buy goods and services. It's also sometimes referred to as your credit card debt.

Withdrawing money from an ATM on a credit card is known as a cash advance, and it nearly always attracts a cash withdrawal fee, usually of around 3%. In addition, interest is charged on cash withdrawals from the day you take the money out, sacrificing your standard interest-free period.

Several other transactions - including buying stocks and shares, foreign currency and lottery tickets - are frequently treated as “cash-like” transactions by card providers and have the same rules and fees applied to them.

Your credit limit is the amount you can borrow on your credit card at any one time. If you exceed this amount, you can be charged a fee - typically £12 - and it can leave a mark on your credit report.

You won’t usually find out your credit limit until the end of an application process - although you can ask your provider to increase – or decrease – your credit limit at any time.

Credit limits are set based on your credit history and your earnings.

Once you've reached your credit limit, you need to make a payment to bring down your balance before you can use the card again. Find out more in our guide to credit limits.

Your credit report is your history of borrowing and paying bills over the past few years. Lenders send this information to one or more of the three credit reference agencies, which compile reports on UK residents.

Before deciding whether to let someone borrow, lenders check your report from one or more of the agencies. You can request a copy of your credit reports to ensure there are no mistakes on your file, request changes if you spot one and add notes explaining any missed payments.

Your credit score is calculated based on your credit history. Each credit reference agency has its own method of calculating this.

Your credit score will go up for things like making payments on time and down for things like being late or defaulting on a loan. Typically, the higher your score, the more likely you are to be offered a lower rate of interest or higher credit limit.

There is no absolute pass or fail mark attached to a credit score, with each lender making its own decision on what it considers acceptable.

If you miss a few payments, generally between three and six, your credit card provider will send you a default notice, giving you at least 14 days to pay the amount stated on the notice. 

Court action could be used to recover the debt, and if you fail to make the payment, your account will be “defaulted”, meaning you won’t be able to use your credit card anymore. It is possible that your provider may have already blocked spending on your account after the first couple of missed payments. A record of the default will also stay on your credit report for six years, making it harder to get any form of credit throughout this time.

A Direct Debit is when you give a company permission to take payments automatically from your bank account. It decides the amount, but you are free to cancel the arrangement. For example, you can set up a Direct Debit to pay off your credit card. This could be for the minimum amount due, a fixed sum, or the entire balance.

Minimum eligibility criteria define the attributes the provider expects customers to have before offering them a product. They’re designed to help customers understand if they should proceed with an application.

Meeting the minimum eligibility criteria is not a guarantee of approval. Eligibility criteria include factors such as age, salary and sometimes other details, depending on the product.

If you buy something abroad or from an overseas website, you are likely to be hit with a foreign transaction fee, which is often around 3% of the total payment.

Some credit cards charge no foreign transaction fees and are designed for use abroad. However, cash withdrawals tend to incur an additional cost, whether at home or abroad. The exchange will be based on Mastercard or Visa currency rates (depending on who issues your credit card).

Interest-free credit cards allow you to either transfer a balance, make purchases or transfer cash to a current account without paying any interest on your balance for a set period. However, you must keep making at least the minimum monthly repayment during this time.

Once the 0% deal is over, you will be charged interest on any remaining debt at your standard APR. With balance transfers and money transfers, you will usually have to pay a transfer fee. 

Every credit card has a minimum monthly repayment amount set out in its rules, which you can find in the summary box.

The minimum payment is calculated by working out what interest you've built up over the past month and then adding a small percentage of your total balance. If you have a small overall balance, there might be a fixed sum instead - for example, £5.

As minimum monthly repayments are set at such low levels, it’s best to pay off more than this each month if you can. You’ll clear your debt faster and pay less interest too.

If you take out a balance transfer or money transfer credit card, you will usually be charged a transfer fee to transfer funds. This is usually 1-3% of the total amount you move over for a balance transfer and about 3-5% for a money transfer.

The annual percentage rate (APR) is the interest rate at which you will borrow money on your credit card. It's typically stated as a yearly interest rate and includes any fees and costs associated with the card. In most cases, you can avoid paying interest by clearing your credit card balance each month.

Unlike joint current accounts, there is no such thing as joint account for credit cards. What you can do is add an additional card holder to your card, such a partner, child or parent. This means that the additional card holder will have their on own seperate card, but you will be responsible for any debt accumulated on that card.

Yes. Most cards have a 14-day cooling off period that starts from the day you receive the card. If you change your mind about the card during that time, you can return it to the provider. While there is no penalty fee, you do have to pay off any balance you may have accrued on the card within 30 days.

If your credit card application is rejected, avoid applying right away with a different provider. The best thing to do is to wait at least six months before you apply again.

But if you urgently need access to credit, you could opt for a credit card for bad credit, which will have more lenient eligibility requirements.

If you miss a repayment on your credit card, you're mostly likely going to be charged a penalty and lose any introductory benefits, such as an interest free offer. It will also go on your credit report as a negative mark and hurt your credit score.

You can check your credit score by using a credit reference agency. These are companies that collect information about your credit behaviour to determine your credit score. Experian, Equifax and Transunion are the three main credit agencies in the UK. Read more about in our guide on how to check your credit rating