How well do you know your credit card?
We use our credit cards more than 270m times a month in the UK whether online, by phone, or over the counter – but do we really know how they work? Take or quick credit cards myth quiz to see if you can separate fact from fiction.
We use our credit cards more than 270m times a month in the UK whether online, by phone, or over the counter – but do we really know how they work? Take or quick credit cards myth quiz to see if you can separate fact from fiction.
Let's start with a bit about you...
Are you...
Tell us your age
Where is your home located?
Having no credit cards is best for my credit score
Myth
Having one or more cards that you manage effectively is best for your credit score
Everything I buy on a credit card will be protected under the Consumer Credit Act (section 75)
Myth
Only if the purchase value is above £100 and less than £30,000 and is a direct payment with the merchant. It also doesn't apply if you make a purchase with cash withdrawn from your card
The representative APR may not be the rate I am offered if I am accepted for a credit card
Fact
The advertised APR is representative which means it only needs to apply to 51% of successful applicants
My monthly repayments will go towards paying off the most expensive part of my debt first
Fact
This is known as 'allocation of payments'. If some of your balance is on 0% and some is incurring interest, your payments must go towards the interest-bearing part of your balance first
I can choose to transfer an existing balance to any other credit card
Myth
It will have to be to a credit card provider from a different banking group
I will be charged a fee to transfer a balance from one credit card to another
Myth
Some balance transfer cards with shorter 0% windows do not charge a balance transfer fee
The amount of my available credit card limit/s that I use affects my credit score
Fact
This is known as 'credit utlilisation' score, and the lower it is, the better
Interest rates charged on my credit card are the same whether I use it for purchases or to withdraw cash from an ATM
Myth
Interest that is applied to cash withdrawals is usually higher than when you use it for purchases
I don't have to set up a monthly direct debit for my repayments
Fact
It's a good idea to do so, but not necessary so long as they are paid
I will need to tell my provider if I want to use my card overseas
Myth
You don't have to, but it's good practice - and you have nothing to lose
You scored...
25
The more you know about credit cards, the better off you will be.
Start by making sure you have the right kind of plastic for your needs - whether that's interest-free borrowing, paying off existing debt, or collecting rewards and cashback. And don't forget the consumer protection that credit cards offer too.
Then just sit back, all Money Calm, and watch it work in your favour.
Compare credit cards now
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Credit Card Myths questions on https://www.moneysupermarket.com/