Costs

In order to hold a credit card you may have to pay an annual fee. This can be anything from around 15 GBP to several hundred pounds. Although credit cards are effectively a form of borrowing money, you still need to pay off a small amount of the balance every month. Normally this is very low; such as 3-5 percent of your balance, or 5 GBP whichever is greater. The rate at which you are charged interest on your balance is determined by the card’s APR (Annual Percentage Rate), or in the case of new cards, by the introductory interest rate. A card with a very low rate may at first glance appear a good deal, but when this period has expired, it may jump up to a much higher APR. This is why it is always important to check both the Typical APR as well as the introductory rate.