What is a...

Credit Card

A Credit Card is a bank-issued payment card that entitles the holder to a line of credit for the purchase of goods or services.

How do I see my Credit Cards and their balances?

Any Credit Card accounts that have been shared the Credit Reference Agencies will appear on your Credit Report, giving you a detailed list of each lender, outstanding balance, account status, and much more.

Your Multi Agency Credit Report collects your complete information from Equifax, Experian, TransUnion, and Crediva, letting you see exactly what a lender will see whenever you apply for credit – this includes your credit history and any recorded Credit Cards.

If you haven’t already, you can try checkmyfile free for 30 days, then just £14.99 per month. Cancellation is hassle-free online at any time.

How do monthly card charges work?

The cardholder can choose between repaying the amount borrowed in full with a single payment, or with smaller amounts over a longer period – repaying over multiple months means that interest will be added to the outstanding balance.

This is where APR comes into the mix: if you do not clear the amount owed on time, the interest you are charged will be based on the card’s APR. The higher the APR, the more you will pay.

If you fully clear the balance each month, you will not be charged interest, as there will be no balance on which to apply the monthly interest rate.

Those who pay off the full balance every month are known as ‘Full Payers’ and those who pay over a longer period are called ‘Extended Credit Takers’. Full Payers are rarely profitable for credit card issuers, but extended credit takers are significantly more profitable due to the interest income stream afforded to the credit card issuer.

Late payments (not paying at least the minimum monthly payment on time) will be reported to the Credit Reference Agencies, resulting in negative markers being added to your Credit Report. Consecutive late payments are ‘arrears’, as these will harm your Credit Report even further. This adverse information damages your creditworthiness and can make it harder and more expensive to take out credit.

When applying for a Credit Card, you will undergo a credit search in accordance with the Consumer Credit Act 1974, which influences the outcome of your application.

Can a Credit Card help my Score?

Having a Credit Card account on your Credit Report can either help or hurt your Credit Score, depending on how the account has been managed.

If all payments have been made on time, you remained within the credit limit, and you have a long history recorded showing you as a reliable borrower, you can expect the Credit Card account to help your creditworthiness.

This is because lenders tend to rate for risk when assessing credit applications, favouring customers that appear reliable at repaying the borrowed amount. Any evidence you have recorded on your Credit Report that makes you appear reliable will work in your favour.

The opposite is also true, where any late payments, arrears, or defaults recorded on your Credit Card accounts can damage your Credit Score.

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