Low rate credit cards becoming a rare breed
If you want to take advantage of a low rate credit card, then now might be the best time to do so. Recently there have been some major changes in the world of credit cards; fees for services such as cash withdrawal and use of cards abroad have gone up, limits have been cut and more applications are being turned down. With the economic downturn currently affecting the market both in the UK and abroad, things may get worse before they get better. This means even more changes to the types of cards being offered. One type of card that may be affected is the low rate credit card.
If so many credit card applications are being denied, then how can you get accepted for a low rate card? There are some things that you can do to improve your chances. All of these concern what is known as your credit rating. A credit 'rating' is not a score - it is a file listing your credit history. Your credit file contains details of repayments you have made or missed, agreed spending limits and so on. It is this file that is examined by financial service providers when you apply for credit of any sort. Previously rejected applications are recorded as well, and can affect whether you may be accepted for future credit. Too many rejections are not a good sign to financial companies.
When you apply for a credit card the bank offering the card will take a good look at your credit history, more commonly known as your credit 'rating'. The word rating is misleading because it implies a score of some type. Your credit history is a lot more than just a number. Your credit rating is held by three main credit-referencing agencies, specialising in monitoring people's financial 'character'. This report provides information on repayments that you made or missed, your credit limits, when you applied for cards and other relevant information. The decision to issue you with a credit card will depend on the report the credit card company receives from the referencing agencies.
If you still feel that a low APR card is the best one for you, there are ways to improve your chances of being accepted by the credit card companies. The most important thing to do is to improve your credit rating. Your credit rating data is held by three companies in the UK and is a record of your repayment habits, the amount of times you have applied for credit and so forth. It is checked by financial providers before you are accepted for any financial service. If you have a poor credit rating, you are more likely to be rejected for a card. In the past, financial companies have chosen to overlook minor flaws in an applicant's credit history. Nowadays, they are far more particular.
Your credit rating can be improved, though. Applying for credit and being accepted will boost your rating. Paying off loans and credit that you have been given in full, and paying off monthly repayments on time will prove to credit card companies that you are not a "bad risk" customer. You can simply apply for credit that can be easier to get hold of, such as store cards. You can then make purchases using that card each month and pay it off in full in the following months, again establishing a pattern of good credit behaviour. Alternatively you can take out a small loan and do the same thing, ensuring you meet all the payments in full, preferably paying more than the required minimum amount.
Certainly the number of low rate credit cards is declining. However, they will not die out entirely. If you have set your heart on this type of card then it would be better to start working on your credit rating than applying willy-nilly and potentially damaging your chances of acceptance because of numerous rejections. Consider why you want a low rate card, as there may be something else on the market more suited to your needs. If you want to transfer an existing balance then perhaps a 0% balance transfer card would be better. If you want to make a cash purchase then take a look at the 0% on cash purchase cards instead.
If so many credit card applications are being denied, then how can you get accepted for a low rate card? There are some things that you can do to improve your chances. All of these concern what is known as your credit rating. A credit 'rating' is not a score - it is a file listing your credit history. Your credit file contains details of repayments you have made or missed, agreed spending limits and so on. It is this file that is examined by financial service providers when you apply for credit of any sort. Previously rejected applications are recorded as well, and can affect whether you may be accepted for future credit. Too many rejections are not a good sign to financial companies.
When you apply for a credit card the bank offering the card will take a good look at your credit history, more commonly known as your credit 'rating'. The word rating is misleading because it implies a score of some type. Your credit history is a lot more than just a number. Your credit rating is held by three main credit-referencing agencies, specialising in monitoring people's financial 'character'. This report provides information on repayments that you made or missed, your credit limits, when you applied for cards and other relevant information. The decision to issue you with a credit card will depend on the report the credit card company receives from the referencing agencies.
If you still feel that a low APR card is the best one for you, there are ways to improve your chances of being accepted by the credit card companies. The most important thing to do is to improve your credit rating. Your credit rating data is held by three companies in the UK and is a record of your repayment habits, the amount of times you have applied for credit and so forth. It is checked by financial providers before you are accepted for any financial service. If you have a poor credit rating, you are more likely to be rejected for a card. In the past, financial companies have chosen to overlook minor flaws in an applicant's credit history. Nowadays, they are far more particular.
Your credit rating can be improved, though. Applying for credit and being accepted will boost your rating. Paying off loans and credit that you have been given in full, and paying off monthly repayments on time will prove to credit card companies that you are not a "bad risk" customer. You can simply apply for credit that can be easier to get hold of, such as store cards. You can then make purchases using that card each month and pay it off in full in the following months, again establishing a pattern of good credit behaviour. Alternatively you can take out a small loan and do the same thing, ensuring you meet all the payments in full, preferably paying more than the required minimum amount.
Certainly the number of low rate credit cards is declining. However, they will not die out entirely. If you have set your heart on this type of card then it would be better to start working on your credit rating than applying willy-nilly and potentially damaging your chances of acceptance because of numerous rejections. Consider why you want a low rate card, as there may be something else on the market more suited to your needs. If you want to transfer an existing balance then perhaps a 0% balance transfer card would be better. If you want to make a cash purchase then take a look at the 0% on cash purchase cards instead.
About the Author:
Sophie Wright is a financial researcher specialising in UK Card offers and is keen to create awareness about the offers availble to consumers by using compare credit card sites.
posted by Debt Consolidation Loan at
3:41 AM
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