Top 3 recommended cards

Web site's online application...
Egg Visa Credit Card	Includes everything in one card. Good all rounder
Citi Credit Card Classic / Platinum	Classic and Platinum card very similar – only cash advance rates differ
Capital One UK - Platinum MasterCard	Popular online credit card

Your rights when buying on credit

When you purchase goods using either a credit card or with a credit agreement that the trader has arranged with a separate finance company and the total cost of the transaction is in excess of £100, you will have an equal claim against the finance company.This applies even though you may only have paid the deposit by credit.These rights are provided by Section 75 of the Consumer Credit Act 1974.

BEWARE

If you do not keep up payments, you will be in breach of contract and may be sued for the outstanding balance.Also if you are buying a car on hire purchase,it is likely that the finance company (the owners)will repossess the vehicle.You could also be liable to pay any expenses that the finance company incurs in carrying out any necessary repairs to the vehicle.

TYPES OF CREDIT

Credit Cards

As credit cards are both easy to use and are accepted by the majority of traders in both the U.K. and abroad they are the most commonly used type of credit.

Under the provisions of Section 75 of the Consumer Credit Act 1974. If you buy goods or services costing in excess of £100 using a credit card, should the goods or service prove to be defective, you will have an equal claim for compensation against both the seller of the goods or service and the finance company.

Section 75(equal liability)only applies to credit transactions, therefore, the finance company does not have any liability for purchases that have been paid for by chargecards as these are debit cards not credit cards.American Express and Diners Card are examples of debit cards.

Credit Sale

These are agreements where the goods are supplied by the trader who, acting as an agent,then arranges finance for the consumer with a separate finance company.A copy of the signed credit agreement is retained by the consumer,and another copy is sent to the finance company.If the finance company approve the loan they will sign it and return a signed copy to the consumer.

Interest Free Credit

Many stores now offer consumers the option to purchase expensive items on credit but do not require the consumer to make any payments for several months. These schemes are also credit sales and therefore, the finance is supplied by a separate finance company.

The consumer has to sign a credit agreement and usually has to agree to make payments by direct debit but with the option to settle the account in full by the end of the interest free period. If the account is not cleared within the time period, then the finance company will activate the direct debit and payments will be taken out of your account. Interest will also be payable on the total amount of the loan from the date of signing the agreement.

Most companies do send you a reminder towards the end of the interest free period, however, as it is your responsibilty to ensure payments are made on time, it is recommended that you keep your own records.

Hire Purchase

This type of credit tends to be used for the purchase of vehicles. When a consumer negotiates with the garage to buy a car on hire purchase,the garage then sells the car to the finance company, who as the owner, hire the car to you. You will have an option to buy the car at the end of the agreement, but you will not become the owner until the last payment has been made. Until you have made your last payment, you will also need the permission of the finance company to sell the vehicle. Any faults that occur will be the responsibility of both the finance company and the garage, and you can refer your complaint to either of them.

Cancellable Agreements

Credit agreements signed at the traders premises are not cancellable. However, if you sign the agreement in your home, you have a short period before the agreement becomes binding and you can cancel without any financial penalties.

Benefits of using your credit card.

If you buy goods, which cost over £100, using your credit card, you have an equal claim against finance company. This is very useful if you have faulty goods and the seller has ceased trading as you can hold the finance company liable for the total value of the contract.

This benefit will also apply if you have purchased goods abroad, which cost over £100, which then prove to be faulty.It will be far easier to pursue a claim against the finance provider than to try to pursue a claim through a foreign court.

You can take either or both parties to the County Court.

You are entitled to have a written quotation which includes the *A.P.R. before you purchase the goods.

*Annual Percentage Rate

Credit Reference Agencies

These companies keep records of the credit worthiness of the majority of U.K. residents and obtain the information from a variety of sources such as courts and companies who are owed money. They sell the information to finance companies who, before they authorise a loan, need to check to see whether you have defaulted on any loans or have any outstanding County Court Judgements (CCJ).

The finance company will base it's decision to loan on the information supplied by the agency.

As the agencies use a point scoring system, you could be refused credit purely because, without any records, the finance company may not be willing to take a risk by authorising a loan.

A63

07/99

This is relevant for the following nation(s) only:

England
Wales
Northern Ireland

Information on bad credit credit card :