6 Things Everyone Should Know About Their Credit Card

Credit cards come with a host of hidden perks. If you’re not using them, it’s likely you’re missing out. Here’s what you need to know:

Your credit card can be more than just a handy way to pay for things.

Once you know what it has to offer you’ll be able to use it to unlock bonuses that will make a big difference to the way you borrow, spend and manage your money.

Here’s 6 top credit card perks that you need to know about:

1. You can use it to get cash quickly

Ordinarily withdrawing cash on your credit card is a really expensive way to borrow, with cash advance fees and higher interest rates driving up the amount you have to repay.

However, with the right credit card you can move cold hard cash directly from your credit card into your current account and then pay off what you owe – interest free!

To do this you just need a credit card that allows 0% money transfers.

All you pay for your money transfer is a small, one off transfer fee that’s usually around 3%-5% - considerably less than most personal loans.

You’ll then be able to pay off your borrowing as fast or slowly as you like without paying a penny more interest.

Of course, you will need to make sure you’ve cleared your card balance by the end of the 0% period or you’ll be hit with a potentially hefty rate of interest and undo all the good work you’ve done to get cheap credit.

Read our guide: Can You Transfer Money From A Credit Card To A Bank Account? to find out how to avoid the pitfalls and ensure you don’t get caught out.

You can also compare top 0% Money Transfer credit cards using our 0% Money Transfer comparison table.

2. It can be cheaper than the best personal loan

Did you know that if you pick the right credit card you’ll be able to use it as a cheap, flexible almost fee-free personal loan?

Life of balance cards offer a single low interest rate on your credit card borrowing for life, so you have plenty of time to repay without the fear of an interest hike.

This means you can buy using one credit card (preferably with cash back or rewards) and then transfer your outstanding balance to a long term - low interest home.

While some 0% balance transfer credit cards now offer interest free borrowing for anywhere up to 2 years, cheap lifetime balance transfer cards are ideal if you don’t want to worry about shuffling your credit card borrowing or would like to spread your repayments over several years.

Unlike most personal loans, they are also more flexible if you want to vary the amount you pay back each month.

While you’ll always have to repay a minimum amount, you can choose to reduce your outstanding balance quicker if you have more money free to do so one month or just pay the minimum amount when cash is tight.

For more help choosing the right lifetime balance transfer credit cards read our guide: Lifetime vs. Interest-Free Balance Transfer Credit Cards or to compare the best cards on the market visit our Life of Balance Transfer Credit Cards table.

3. It can protect you against dodgy dealers

One of the best benefits of using a credit card to pay is the extra protection it gives you if something goes wrong.

Whenever you buy something that’s worth more than £100 (although less than £30,000), you just need to pay a penny on your credit card and you’ll be granted full Section 75 protection.

This makes your credit card provider partly liable for ensuring you get what you paid for, and legally obliged to compensate you if you don’t.

This extra level of protection can be invaluable especially on larger purchases or when you buy or book something in advance.

For example, say you pay for a holiday using cheque or cash and the travel agent you use goes bust. If you don’t have decent travel insurance you have no way of claiming your money back.

However, pay for at least part of it using your credit card and you should be able to recoup the cost from your card company instead!

The same applies if you buy something online that fails to materialise, or if a purchase you make turns out to be faulty and the company gets awkward about sending you a replacement.

Read our guide: How Section 75 of the Consumer Credit Act Protects Your Credit Card for more information on making this scheme work for you and what to do if you need to claim.

4. You can use it to borrow interest free (even without a 0% deal)

Did you know all credit cards can be used for interest free borrowing? While this sounds fanciful it’s actually true.

Interest free borrowing, at least for a short time, is available with all major UK credit cards.

The key to making this work for you is making sure that you have the money ready to repay what you borrow in full before your statement due date – this is usually within 45-60 days.

The key is to pay off the full balance on your credit card statement each month so you’re not charged.

To maximise the length of your interest free period, make your transaction just after your statement date, this will make the transaction appear on next month’s statement and maximise the time you get interest free to repay.

It’s worth thinking about setting up a direct debit to pay off your card automatically because you’ll be stung by interest charges if you carry some of what you borrowed over to your next statement.

You can spread the cost further interest free

If you need more time to repay money you’ve borrowed there are other, interest free options available too.

Many credit cards will offer 0% on purchases for a fixed period (anywhere up to 15 months+) after accepting your application.

This means you can then use the card to make a large purchase and repay what you owe with spending a penny on interest charges.

To compare the best 0% deals you can use our 0% on Purchases Credit Cards table.

If you really need to carry your borrowing over beyond this you can then look at making a 0% balance transfer onto the card that gives you long enough to repay your borrowing without charging you too much in handling fees.

5. It can give you cheap travel money

Getting the best deal on your foreign currency can be a tricky task, but with the right credit card you have an easy way to maximise your holiday cash.

As long as you have a credit card that doesn’t charge you for overseas transactions or cash withdrawals using your card could be the path to cheap travel money.

This is because the exchange rate your credit card applies to overseas purchases – the interbank lending rate – tends to be much more generous than the exchange rates you’ll find on the high street.

This means that you can use your credit card to get the best exchange rate when you withdraw cash or make purchases abroad.

Of course, to make you don’t negate any savings you make you will need to repay your credit card borrowing as soon as possible so you’re not hit with interest on your borrowing.

For more information on using your credit card abroad read our 5 Rules for Using Your Credit Card Abroad or to find the best overseas credit card use our dedicated Credit Cards to Use Abroad table.

6. You can get amazing freebies and rewards

Whether it’s air miles, shopping vouchers, flights or cold hard cash, if you don’t need to borrow then you can get something back for using your credit card.

There are a host of different benefit and reward packages on offer so you just need to work out which is going to be most profitable for you.

If you’re going to do this you do need to be careful.

With most reward and cashback credit cards and cashback credit cards you will only profit if you repay your balance each month in full. Spread the cost of your purchases and it’s likely that the interest you’ll be charged will outweigh any of the benefits you earn.

For help choosing the best rewards credit card, read our guide: How to Get the Best Credit Card Rewards or compare them directly using our Cash back & Rewards credit card table.