Credit Card Calculator - How Much It Will Cost
How credit cards work
A credit card allows you to borrow money from a credit provider without having to give any upfront security. Banks and building societies are the first place most people will go to for a credit card, but there are many supermarkets, airlines and stand-alone credit card companies that issue credit cards. You need to be 18 or older to apply for a credit card and the issuing party will request basic information from you to submit with the application. Just like with any other loan application, there’s no guarantee that the application will be approved.
The information that you provide and your credit score will determine your credit limit, which is the maximum amount you can borrow. Your credit card balance can never be more than this amount at any one point.
When you make a purchase with a credit card, the card issuer will make the initial payment to the retailer. The card issuer will then send you a statement once a month that includes a breakdown of the payments during the billing cycle and the total amount you owe.
There is a minimum required amount you have to pay back every billing cycle, which is a percentage of the outstanding balance. But to keep fees and interest low, it’s best to pay off the balance in full every period.
A wide range of credit cards exists on the market, including cashback cards, balance transfer cards and reward cards. The right card for you will often depend on your lifestyle and your financial goals.
Credit Card Information
In 2016 there were 32.3 million credit cards and 51.1 debit cards in the UK.
The average credit card purchase was £53.55, debit card payment £38.43 and contactless transaction £9.40.