About Credit Cards
- Credit Cards UK |
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Zero-Interest Cards
The new idea is the zero-interest balance transfer and/or zero introductory
rate on purchases. This offer holds for a limited period following the
issue of the card, whereafter the interest rate reverts back to its permanent
level. Zero-interest offers are found on all grades of cards.
Reward Cards
Gold, standard and platinum “loyalty” cards pay cashbacks
and other rewards (for example air miles) proportionate to the use of
the card.
Affinity or Charity Cards
These type of cards are issued by a variety of charities or special interest
groups. (for example Mencap, Oxfam, RSPCA, NSPCC, Cancer Research, Nationwide
Comic Relief, Help the Aged). They normally rebate a fixed amount to the
affiliated charity on first use of the card, followed by a percentage
of the transactions charged to the card.
Personal Loans v Credit Cards
The interest rates on credit cards are higher than on other forms of
personal unsecured debt. There are valid reasons for an interest differential,
although the magnitude often defies explanation:
- a credit card serves a dual function as a revolving credit facility
and as an accepted means of transaction.
- The transactional nature of the card requires a security system.
- Credit cards are riskier to issuers because of the probability of
“owner-not-present” fraud.
- Section 75 of The Consumer Credit Act of 1974 makes the credit card
companies and banks jointly liable if the cardholder is a victim of
misrepresentation by the merchant.
If you think a Personal Loan would be more suitable visit our Loans
Centre.
Credit Card Security
Credit card holders are shielded from credit card fraud by the issuers'
undertakings to absorb the costs. But these risks are passed on to consumers
via interest rates and other charges.
Security is built on the encryption of data in transit, using pairs of
public and private keys. But in the absence of some form of electronic
ID there is no certainty that the card user is the lawful cardholder.
There are usually two separate systems that address the question of user
identity:
- A personal password system for online transactions recently launched
by VISA and MasterCard known as “Verified for Visa” and
“SecureCode” respectively
- New PIN-activated “smart” cards
- Verified by Visa/MasterCard SecureCode. This provides secure online
shopping. The card user is presented with a pop-up window accompanied
by a personal message created when the card is initially activated,
which vouches for the authenticity of the pop-up screen itself. The
card user enters a personal password in the pop-up screen to confirm
his or her identity.
For further information on credit cards click
here.
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