Your guide to credit cards

A credit card is a way of borrowing money that lets you buy things up to an agreed limit and pay for them later, either in one go or in chunks.

• You can use a credit card in a similar way to a debit card, making purchases online or in-person
• When you receive a credit card, you'll be given an agreed limit you can spend up to
• If you pay your credit card balance in full each month, you won't pay any 'interest' to borrow the money
• If you don't pay your card balance in full each month, you'll have to pay interest on what you owe, unless you have a special introductory offer from your card provider

The representative example is a handy tool that banks use to help you compare the cost of borrowing in one standard format. 

There are three elements to a representative example:

• Purchase rate: This is the interest rate that will be attached to most goods and services purchases that you make with your card. If you pay off your full balance every month, you won’t pay interest on these purchases
• Representative APR: This is the annual purchase rate, and it is used to show the full cost of your borrowing
• Assumed credit limit: All banks need to quote this amount so you can compare cards. It’s a guide limit, and we use £1200, although it’s unlikely that this is the exact limit we’ll offer when you apply

Things to remember

Applications are assessed on an individual basis. The rate and terms you’re offered will not always match up with the rate you see before you apply. 

A balance transfer is moving a credit card balance from one provider to another, often with a lower (or 0%) rate of interest for a set period. This could help you reduce your monthly payments or clear your debt quicker, but it’s important to note that there may be a fee to transfer a balance and you should consider the costs you will pay when any introductory offer expires.

See all our Balance Transfer card options