What You Didn't Know About Owning a Credit Card

If you were to ask yourself how many credit cards you have in your purse or wallet, the chances are it's more than one. As a nation, there is a staggering 67 million credit cards owned by consumers; on average that's 2.4 cards each.

Credit cards have in fact been around for more than 40 years, but it was only in the 1990s that the market became much more competitive. Although, in recent times a colossal amount of different cards have become available; at times the choice can sometimes seem a little mind-boggling.

However, card companies have worked out that a good way to keep customers and that is to reward points. And, the good news is that points mean potentially, money off your bills! So, how can you make sure that using your card gives you the right rewards?

It is important to understand that if you pay your credit card bill off in full - which around two thirds of card holders do - you're in a win-win situation. This means that all you have to do is work out which reward scheme will be the best for you and then use that specific card for your purchases. Furthermore, some cards combine a loyalty scheme with 0% interest on purchases or balance transfers or both; however you will normally only earn loyalty points on money you spend, not on money you transfer from another card.

This then leads to the question of how quickly will your points grow. Well, not all card loyalty schemes reward users at the same rate, therefore try and find one that will give you the maximum reward on purchases you would normally make anyway. And, if you have to spend money on items you wouldn't normally buy, you'll end up worse, not better off.

But, it is also useful to know that some cards may in fact, double the number of points you earn for the first few months after you sign up, as a bonus.

It is often advised that before signing up to any new deal, that you should always check the small print. Don't be dazzled by the loyalty scheme and ignore the rest of the deal; not all cards are as generous as each other when it comes to the length of the interest-free period. You can get up to 56 days interest-free if you pay your balance on time and in full, but a number of credit cards give you significantly less; in fact, 46 days is not considered that unusual.

In addition, many cards do not charge an annual fee, but some do. Therefore, be very careful about signing up to one that imposes a fee, as it could cancel out the benefits of the reward.

It is also good to know that one of the advantages of paying for your goods by credit card is the fact that you get more protection than if you used cash, a debit card or a charge card. And, if the goods you buy are faulty or if they don't arrive at all, you should first of all try and get a refund or replacement from the supplier. If that fails, you can apply to the credit card company itself. The only restriction is that goods have to cost more than £100 and less than £30,000, although you don't have to pay for them in full with your credit card, as a deposit will be enough.

Indeed, there are benefits to owning a credit card; the most difficult side to it is learning how to use it to good effect, and without unnecessarily going out of pocket.