Multiple Credit Applications: How Many Credit Inquiries Are Too Many?

Applying for a credit cardhome improvement loan, or will generally include a credit check so that the lender can assess your creditworthiness and any risks associated with lending to you. These searches, known as a hard check, will leave a mark on your credit file, so it’s sensible not to submit too many credit applications at once, but this doesn’t mean you can’t shop around.

What is a credit application?

A credit application is when you apply for any form of credit, such as:

Mortgage
Credit card
Secured Loan
Overdraft
Personal loan

Your potential bank or lender will ask for your consent to run a credit check as part of the application process.

When should you apply?

Before you apply for any type of credit, it’s good to check your credit file to ensure that all the information is accurate, up to date, and free of errors. Some of the mistakes that you need to look out for are:

Missed payments on your credit accounts
Wrong addresses linked to your name
Credit applications you haven’t made
Payments that aren’t recorded
Debts that are already paid yet inaccurately recorded

What information is in my credit record?

Your credit report will contain information about your financial history. This comes from banks, credit card companies and building societies you have borrowed money from in the past or currently owe to. There will also be information from publicly available sources, from your mobile phone provider and others. Your report is likely to have the following information:

  1. Your name, current address and other personal details
  2. If you are on the electoral roll at your present address
  3. Joint financial products you currently hold (such as a current account)
  4. How much credit you have outstanding
  5. Missed payments on past or existing accounts
  6. Late payments on past or existing credit cards or unsecured loans / secured loans
  7. If you joined an Individual Voluntary Arrangement (IVA)
  8. County Court Judgements (called “Decrees” in Scotland) filed against you, bankruptcies and home repossessions for six years after they occur
  9. If you have ever moved away whilst owing money

Why are too many applications bad?

When a lender obtains your credit record, they will review how you handle your finances. Each credit check is recorded on your credit report, whether you get accepted or rejected.

Every credit application you’ve made will be apparent to the next lender or creditor you apply. They can view if you’ve been rejected or approved before.

Lastly, making numerous applications over a short time, it could appear to lenders that you are desperate for a loan or credit, which unfortunately may decrease the likelihood they will lend to you.

Finding The Best Single Trip Travel Insurance Policy

When going on a trip abroad, either for work or a holiday, it’s crucial that you get travel insurance to cover you financially if anything goes wrong.

With travel insurance being an essential expense when going away, it’s wise to do what you can to get the best policy available to you. The best way to do this is to compare the providers against your needs and requirements.

Use our helpful checklist below to ensure that you have every consideration covered when selecting your single trip travel insurance policy.

Check what is covered

Travel insurance can be used to provide cover for multiple situations and occurrences. There are numerous must-have features that you should expect your travel insurance policy to cover as standard. These include:

Medical expenses

Your policy should cover the cost of any treatments or emergency surgeries you might have had when overseas. A good policy will cover you up to £1M for European travel and £2M in the United States.

This insurance will only cover urgent treatments that can’t be delayed until you get home.

Repatriation service

This should cover the costs of getting you back home for medical reasons. This also includes paying for any flights you may have missed because of getting medical treatment.

Cancellation/curtailment

If you’ve had to cut your trip short, your policy should provide cover to help you pay for any accommodation or other travel costs that you can’t use or payback.

Missed departure

Your policy should include cover that protects you if you’ve had to pay extra for accommodation because of missing a flight. You can only claim if this delay was out of your control, such as a public transport delay or being involved in an accident.

Delay

If your travel plans are delayed, your insurance provider should pay a certain amount. This delay can be because of poor weather, industrial action, or mechanical breakdown.

Baggage cover

You should expect your policy to cover any damaged, lost, stolen or destroyed luggage.

Personal liability cover

This type of cover ensures you’re insured if you have to pay damages for accidental bodily injury or damages to someone’s property. A good policy will cover you up to £2M, although claims made by family members or work staff won’t be covered.

In addition to this, a good travel insurance policy will also offer you the following. You should favour these insurance providers if you’re looking for more comprehensive cover:

Dental emergency

This provides cover for the costs of emergency dental work while you’re away. Cosmetic treatments are not covered.

Terrorism

This policy covers you for any insured losses if an act of terrorism impacts you while you’re away.

Loss of passport

If you lose your passport, an insurance provider should cover any extra travel and accommodation you needed to make to replace your lost passport.

Who are you travelling with?

Who you’re travelling with could alter the travel insurance policy that you choose.

It might be worth considering a single family policy if you’re travelling with family. This can provide your entire family with cover, and some providers might offer free coverage for your children, making it perfect for young families.

Group policies can be complicated to set up, though, and if you’re travelling with friends, it might be better to insure yourself as an individual. This will allow you to get the cover that you want and could also be cheaper.

What are you doing?

What you’re planning to do on holiday can alter what type of single trip insurance policy suits you. If you’re planning on visiting a beach all day, then the cover you need will alter a lot from those considering extreme sports such as skiing and scuba diving.

If you are engaging in extreme sports, then you’ll have to add that coverage into your insurance policy, as that won’t be covered as standard.

How long are you travelling for?

The duration of your trip abroad could dictate what insurance policy you choose. The majority of insurance providers will only provide cover for trips under 30 days under one policy. If you’re planning on making a longer trip beyond this time, you’ll need to choose a provider who offers longer travel periods, called long-stay travel insurance.

Do you have any medical conditions?

When getting insurance, the cost of it will depend on a few details about yourself. For example, if you’re a smoker or have any pre-existing medical conditions, you can expect to pay a higher fee for insurance, as you’ll be viewed as a higher risk individual.

If you do suffer from medical conditions, it’s important that you declare it and don’t lie, even if doing so saves you money. This is because if you need cover that is related to your pre-existing medical condition, you won’t get anything. Staying honest will ensure that you get the best travel insurance for you.

Getting quotes

It is imperative to compare several quotes to get the right cover for the right rate. Otherwise, you might pay more on your policy yet not get the cover you need or prefer.

It is ideal to compare quotes that offer all the cover you need for your travel. This can also help you afford the possible excess that you need to pay if you make a claim.

Getting travel insurance can be tricky, but you can find the right provider for your needs by using a plan when searching the market.

 

 

Should You Get An Annual Travel Insurance Policy?

If you’re a regular traveller going abroad many times in a single year, it may be worth considering an annual travel insurance plan.

Unlike having to take out insurance before every trip, you can buy one policy that covers every holiday or trip you take within 12 months. With one purchase of an annual insurance policy, frequent travellers will have the convenience of knowing they’re covered every time they set off.

Although useful for frequent fliers, it may not be the best value for money if you’re not going on many trips. This guide aims to help you decide whether an annual trip insurance policy is right for you.

How often are you flying?

Deciding to get an annual policy depends on how frequent you travel within a year. If you’re just going for a holiday once or twice, a single trip cover should work for you.

If you know you’ll likely travel out of the country frequently and may stay longer; you’re a perfect fit for an annual insurance cover. This suits people who are going on business trips regularly or families who have two or more yearly holidays.

Where are you travelling to?

Annual travel insurance policies do not cover the entire globe. In fact, there are usually 3 categories you can choose from when selecting your annual cover:

Europe
Worldwide, excluding the USA, Canada and the Caribbean islands
Worldwide

Each category may have altering prices due to the perceived risks and scope of the regions. Having policies broken down like this can make your coverage more expensive, depending on your destination.

If all your holiday destinations are in Europe, then you’ll be able to have the cheaper European policy. If you want to visit America, then you’ll have to get a new policy to include that region. This can make the insurance rather expensive.

Also, do note some countries may not be covered once classified as dangerous or risky by the FCO (Foreign & Commonwealth Office).

How long are your trips?

Despite being able to take multiple trips with an annual travel insurance policy, most providers are likely to have a limit on how long each trip can be.

Usually, this limit is 30 days. This means if you’re planning on taking trips that exceed this timeframe, then you likely won’t be able to get an annual travel insurance policy. Some providers may be able to up this to 90 days, although this may increase the cost of your insurance.

Some policies also set a total travel limit. Most should set a total limit of 180 days within a year. Each time you take a trip, the length of your trip will add to your total limit, and once you go beyond 180 days, you’ll no longer be covered. It pays to check your policy when getting an annual trip cover and determine if a total limit is set.

What does it cover?

Annual travel insurance has the same coverage as single trip policies, which include cover for:

Cancellation and Delays
Medical Expenses
Baggage and Personal Money
Repatriation

It does not include additional travel insurance cover you may have to add to a policy, such as extreme sports travel insurance. This means this type of travel insurance may not suit those who frequently travel for skiing.

Single trip or an annual policy?

Deciding whether to get a single trip or annual trip travel insurance policy depends on your circumstances. If you only have to travel once or twice within a year, it may suit you to get a single trip cover. If you’re travelling more than 3 times a year, it may be appropriate to consider an annual travel insurance policy.

 

Car Insurance Excess: How Does It Work?

What is car insurance excess?

Car insurance excess is an agreed amount that you will pay towards any individual claim you make on your car insurance.

Let’s assume your insurance policy holds a £70 excess, and you’re unfortunate enough to have an accident. The price of your repair is £1,070, so the insurer will shoulder £1,000, which leaves you with £70 excess to pay the bill in full.

Now, let’s say you’ve only grieved for a broken door mirror. All it requires is a new lens, which costs £20, £50 cheaper than your excess, you can’t claim for it, as the cost of repair is lower than the excess amount.

Most policies come with two types of excess – compulsory and voluntary.

What is compulsory excess?

Compulsory excess is the amount you must pay when you claim on your car insurance; this figure is set by your insurance company and is non-negotiable. The amount can change based on various factors, including your driving skill, age and the type of car you drive.

A new driver may need to pay a greater compulsory excess than a more experienced driver as they are seen as a higher risk.

What is voluntary excess?

On top of your compulsory excess, voluntary excess is an amount you choose to pay towards insurance claims. By raising your voluntary excess, you may be able to bring your insurance premiums down. However, remember that you will have to pay this out if you make a claim, and you can decide not to pay any voluntary excess and only compulsory excess if that suits you more; it all depends on how much you can afford to expend if you need to make a claim.

When do you pay excess on car insurance?

You will need to pay your compulsory and voluntary excess (the predetermined amount you chose when taking out your insurance) whenever you claim on your car insurance. This is regardless of fault; however, in many cases, if it is decided that you were not at fault, the insurance company will claim back your excess.

How To Get Travel Insurance With A Pre-Existing Condition

It’s important to get travel insurance when you go abroad because it provides protection if things were to go wrong on your trip.

When getting travel insurance, there are a lot of factors that determine how much you’ll have to pay, such as where you’re going, how long you’re travelling, and what you have planned while away – like if you’re partaking in extreme sports.

However, one thing that can contribute to your premiums the most is if you have any pre-existing medical conditions.

If you have suffered or currently suffer from medical conditions, insurers may deem you as a higher risk individual, because you may be more likely to make a claim than someone with no medical issues. The increased prices can put off people with medical conditions from getting travel insurance – which is a huge risk – or put them off from travelling entirely.

Here’s a look at how to get the best out of your travel insurance if you have a pre-existing medical condition.

Why you must declare pre-existing conditions

It may be tempting not to disclose any conditions if you’re getting quoted much higher travel insurance premiums due to pre-existing conditions.

This is not something you should do.

Not only is it misleading, but if you need to make a claim while on a trip that’s related to your medical condition, your insurance provider may not payout, leaving you with no cover.

Even if you need to claim for something unrelated to your current health issue, some providers may still not payout if you’re found to have lied on your insurance application.

Where can I get cover with a pre-existing medical condition?

Most popular travel insurance providers should provide cover for those with medical conditions. However, not all of them will, and depending on your specific condition and severity of it, some may refuse you cover.

As well as from the standard providers, you can get insurance from a provider that offers a specialised service for those with medical conditions. Although these will still likely be more expensive, you may get better coverage that suits your specific needs and requirements.

What is a pre-existing health condition?

It may be confusing about what a pre-existing health condition is that needs to be declared. Some common conditions you need to declare are:

Cancer
Arthritis
Heart conditions
Diabetes
IBS or Crohn’s disease
Psychological issues
Asthma

For some of these conditions, you’ll have to disclose if you’re still under treatment or in remission. For example, if you’re in remission from cancer, you’ll still have to pay higher travel insurance. The longer your remission period, the lower your insurance should become, in theory.

You’ll also need to disclose if you’ve had surgery in the last five years by most providers.

For the majority of insurance providers, pregnancy is not considered a health condition. This means if you need medical assistance on your travels when pregnant, you should get covered on a standard insurance policy.

Needing to wear glasses or hearing aids is also not considered a medical condition.

What can I claim?

When you take out travel insurance with a pre-existing medical condition, you should be covered for any claims that occur immediately or obliquely from the conditions you have declared. For instance, you will be covered if:

  1. You experience breathing difficulties and have a chest infection that needs medical treatment abroad.
  2. You endure high blood pressure, having a heart attack or stroke on your holiday.

As well as medical cover, you should also be able to claim for other issues that may happen on your travels. These include:

  1. Cover for cancellation or travel disruption
  2. Personal liability
  3. Lost baggage

All of this should be covered in one travel insurance policy, and you shouldn’t have to take out another policy to cover you for none medical situations.

How to save money on travel insurance with a pre-existing medical condition?

Compared to regular travel insurance, you’ll likely have to pay more for cover if you have a medical condition. However, there are things you can do to help you get the best deal for your situation.

The first is to shop around and compare quotes. By comparing premiums offered by various providers, you’ll be able to identify the insurance that provides the best value for money for you.

It’s also an excellent tactic to buy your travel insurance in advance. The longer you leave it, the more you’ll be charged, so by being organised and proactive, you can save money and get cover for any cancellations that may happen too.

If you’re travelling more than once a year, getting multi-trip cover may be worth getting. This can be a lot cheaper, but you’ll need to learn more about annual travel insurance to figure out if it’s best for you.

Finally, paying more in excess may help you reduce the premiums because doing this tells insurers you’re less likely to make a claim.

Doing all of this can help you get the best prices on insurance if you have a pre-existing health condition.

Single Vs. Annual Trip Travel Insurance

The choice between annual and single trip travel insurance can be tricky. However, deciding which plan you get is a matter of understanding what you need to safeguard on your travel.

Which is cheaper?

Which one is cheaper will depend on how many times you plan to travel within a year. If you’re sure to go for one or two holidays overseas, a single trip policy will suit your needs.

However, if you plan to take several voyages overseas, an annual multi-trip policy could be more affordable. It can help you cut travel insurance costs.

What is single trip travel insurance?

Single trip travel insurance is a policy that covers you for one trip abroad. When taking out the policy, you will need to confirm your destination, set off date, and the end date of your trip. You will only be covered at your specified destination within the set period with this type of insurance.

Pros

  1. Cheaper than annual cover
  2. Cover-specific based on your trip
  3. Can hold a higher maximum age than annual cover

Cons

  1. Can be expensive if taken per trip
  2. Shorter-term cover
  3. The policy is just for one time travel

What is annual travel insurance?

This type of insurance, also known as multi-trip travel insurance, covers you each time you travel in a set period, usually 12 months. When applying for an annual cover quote, your provider will provide you with choices between:

Europe
Worldwide, excluding the USA, Canada and all Caribbean islands
Worldwide, including the USA, Canada and all Caribbean islands

Your cover also includes travel to countries in those areas. For instance, you would NOT be covered if you preferred Europe and progressed to Asia. Also, it can cover any domestic voyages you take within the UK.

Each trip has a specific limit in terms of the number of days you can stay. Several policies will cover an individual trip of up to 31 days. This means you would be covered for trips of 31 days or less but not exceeding 32 days or more.

Some offer terms of 10 days or up to 90 days, so review the policy thoroughly before you take it out.

Pros

  1. Can be cheaper if you plan on travelling several times during the year
  2. You don’t have to get a policy each time you travel
  3. Covers your trips in the UK
  4. Great for spontaneous trip takers

Cons

  1. Has lower maximum age most often
  2. Your cover would not be specific per trip
  3. Can seem wasteful and expensive if you don’t travel more than once or twice in the year

What can single and annual trip travel insurance cover?

Both types of travel insurance can cover:

Medical expenses
Cancellation
Repatriation
Baggage or belongings
Personal money

Review each policy thoroughly since each policy will cover specific points, but not all will cover everything you need. Also, compare how much you are covered for.

Other circumstances to consider:

Winter sports: Adding winter sports to an annual policy could make it more costly than single trip policies, particularly if you only go on a winter sports holiday once a year.

Pre-existing medical conditions: You must disclose any health conditions when you apply. Annual cover with medical conditions covered can be costly, so check to see if it is cheaper to get single trip cover.

Your age: Several insurers will not offer annual travel insurance for travellers past 75 or 80 years old, so you will necessitate getting single trip policies which do not have any age restrictions.

Should I get a single trip or an annual policy?

Deciding whether to get a single trip or annual trip travel insurance policy depends on your circumstances. If you only have to travel once or twice within a year, you should get a single trip policy. But if you’re travelling often or are likely to book spontaneous trips throughout the year, annual insurance would be best.

More Travel Guides

Read more of our handy guides, whether you’re looking for the best deals on travel money, the best way to spend abroad, trying to understand exchange rates or want to know what to do with your leftover currency.

A Simple Guide On Extreme Sports Travel Insurance Cover

If you’re going on a holiday to try out various extreme sports, you may have to take out a more comprehensive travel insurance plan. A typical insurance policy may only cover low-risk activities, so a venture that includes the likes of sky diving or rock climbing requires a different level of cover called extreme sports travel insurance.

Extreme sports travel insurance explained

Extreme sports travel insurance is a financial safeguard against any costs you may have to pay if things go wrong when participating in extreme sports or activities while abroad.

This includes medical costs because many holiday destinations require payment for medical treatments. This type of insurance may also cover you for any damages to equipment that might have occurred.

Some sports and activities are covered automatically in a single trip or annual travel insurance policy, but the majority aren’t. In case it’s not included, you can add them by paying additional fees.

Because extreme sports are higher risk activities, getting the appropriate cover may cost more than standard travel insurance because there’s a bigger chance you may have to make a claim.

What can extreme sports insurance cover?

Extreme sports travel insurance covers various situations, helping to keep you protected if there’s an issue when doing any of these activities. You’ll get cover for:

Medical expenses

Any medical treatment expenses you may have had because of an injury should be covered with extreme sports insurance – up to a specific fee dependent on your insurance policy.

Repatriation

If injured when abroad, you may have to travel back home to undergo treatment or continue your recovery. The cost of your return or re-entry home should be covered when it’s medically necessary or if you’ve missed your previously arranged flight because you were receiving treatment.

Personal injury

If an extreme sports accident has left you with a permanent injury, you’ll receive a lump sum from your extreme sports travel insurance provider.

Personal liability

By making sure your extreme sports travel insurance has personal liability included, you’ll get cover for any damages you may have to pay for if you’ve accidentally injured someone else or damaged their property.

Activities included in extreme sports insurance cover

The activities covered could alter depending on your extreme sports travel insurance provider. Many may compile sports within ‘packs’ that you can add to your policy, with each sport or activity within that pack covered.

For example, some might offer a winter sports pack covering activities like skiing and snowboarding, or a motorsport pack, which might cover quad biking and race car driving.

Some of the most common extreme sports you’re likely to find cover for include:

Bungee jumping
Paragliding
Scuba diving
Windsurfing
Skiing
Zip lining

To get the best travel insurance for you, it’s best to know what activities you have planned before you travel, so you can find the right policy that covers them.

Sports that need extra cover

Although a lot of sports and activities are covered when you get the standard package offered by extreme sports travel insurance providers, there may be extra activities that you’ll have to add on individually.

These activities have a higher risk of accident or injury, so may require a more expensive fee. Some of the activities that may need extra cover include:

Rock climbing
White water rafting
Zorbing
Quad biking

The activities that need additional cover aren’t universal across all insurance providers. Some might include different activities in their standard package, so it’s good to check around and compare.

Winter sports cover

Most travel insurance providers offer a separate winter sports cover package. This could be the best option to get if you’re going on a ski-centric holiday, for example. These types of packages can cover:

Skiing
Snowboarding
Sledging
Snowblading
Snowmobiling

This insurance doesn’t just protect you if you are injured during your activities. It also provides protection if any of your gear or equipment is lost, damaged or stolen.

Additionally, if you’re unable to partake in your winter sports activities for a consecutive period – usually 12 hours or more – then you’ll also get some form of compensation with this type of cover.

Get the right insurance for you

Travel insurance is important to financially protect you when you’re abroad. To make sure that you’re not suffering more than you need to if the worst was to happen, be sure to get an insurance plan that provides the appropriate cover for you.

 

Money Transfer Credit Card: The Benefits That You Can Get

Money transfer credit cards can be a helpful way to transfer cash into your current account for whatever reason. Some can even charge you 0% interest on the money you transferred for a set period. Read this guide to learn more about how money transfer credit cards work.

What are money transfer credit cards?

A money transfer credit card is a type of credit card that allows you to transfer money straight to your current account. It works the same way as a balance transfer card. However, the transfer goes to your bank account instead of transferring the outstanding balance between credit cards. This can be useful for clearing an overdraft or if you need access to cash.

How does it work?

If you have a money transfer credit card, you’ll have the ability to transfer cash from your credit card to your current account. During any interest-free period, you won’t have to pay any interest on any money you transfer; however, you may have to pay for the money transfer transaction known as the money transfer fee.

What are the benefits of a money transfer credit card?

Money transfers credit cards can help pay off your overdrafts or loans, although it’s essential to ensure you pay off your balance before the interest-free period ends. They can also be useful when wanting to spread the cost of a purchase that can’t be paid by a credit card.

How much does a 0% transfer card cost?

You do not have to pay interest on a 0% transfer card until the interest-free period ends and your outstanding balance remains unsettled. However, you have to pay a one-off fee for processing the transaction to transfer the money to your bank account. This can cost around 2%-4% of the amount you initiated to transfer.

For instance, if the transfer fee costs 3% on a £2,000 transfer, it will cost you £60.

Keep in mind that a money transfer credit card is a type of credit card; hence, they can have similar charges. We’ve created a guide to help you understand credit card charges even more.

Is a money transfer credit card right for me?

To help you decide whether a money transfer card suits you, scrutinise the following factors when comparing money transfer credit card:

Interest-free period

Check on the length of the interest-free period and try to compare which one gives you more time to pay off your balance. You have to ensure that you can afford to pay off the amount before the agreed 0% period ends.

Money transfer fee

It would be best if you considered checking the fees for transferring money to your bank account. The usual fees you can get range between 2% to 4% of the amount transferred.

Time frame for transfers

Several money transfers necessitate you to make a transfer within 60 days of the receipt of the card. If you fail to do so, you could be at risk of losing the 0% introductory rates.

Fees or charges

When choosing the right card, you must understand the fees for transactions and terms. These include charges for transactions outside the UK. You should also check on the costs for exceeding credit limit or fees for foreign usage.

Credit Card Charges: What are they and How to Avoid them?

Before having your very own credit card, it might look like an absolute magic trick seeing someone swipe through the register and walk away with their bag of purchase. It may look simple but credit card charges need a deep understanding for you to avoid it. This guide will show you the different credit card charges and how you can shun them.

Interest Charges

Since credit card allows you to use the credit limit set by your card provider, this acts as a loan. This means that using your credit card means borrowing money which comes with interest charges.

For instance, if your credit card outstanding balance amounts to £100 with an APR of 20%, you’ll likely get an interest rate of £20 per year.

To shun this interest, you must pay off your debt each month. When not possible, you can pay lesser by checking for a card that carries a lower APR.

Fees For Breach Of Terms

Late Payment Charges

Your credit card agreement includes terms for minimum repayments each month; hence, non-payment or delayed payment will be charge for a fee costing £12. If you want to avoid delayed payment fees, you can set up a direct debit to ensure that you do not fall into arrears.

Besides, if you miss payments, this can affect your credit rating which compels your card issuer to increase your interest rates. They can also withdraw any introductory 0% APR deals available.

Fees For Exceeding Credit Card Limit

The credit limit set by your provider is the absolute amount that you can spend on your card. Once you exceed to your limit you’ll be charged approximately £12.

You can prevent exceeding beyond your limit by monitoring your spending and checking your card limit. You can also ask your provider to raise your limit, but you should make sure that you can afford to pay for it.

Dormancy Fees

Some credit cards and store cards impose charges for inactivity. This can happen if you haven’t been using your card for too long say for instance for more than a year. This fee is called dormancy fees. If your credit card charges for dormancy fees, you might consider cancelling the card instead.

Card Charges

Cash Withdrawals

Withdrawing cash from your credit card bears charges which are as follows:

Withdrawal fee – This is usually around 3% of the amount that you take out from your credit card, though there’s normally a minimum charge amount of a few pounds.

Higher APR – The interest rate fees on cash advances is extremely higher than your APR on purchases. This is frequently around 27.9%, but are sometimes greater.

Immediate interest – each time you withdraw from your credit card, you’ll be automatically charged with the interest based on the amount that you took out.

Balance Transfers

When transferring balance or money, you’ll be charged for the transfer which usually costs around 2.5%. This means if your transferred £2,000 to a card with a 2.5% transfer fee, it would costs you £50 to initiate the transfer.

You can save when transferring balance by checking for cards with no fees for transfers or those with lower costs.

Spending Abroad

Using your credit card abroad could carry the charges below:

  • Loading fee which is approximately 2.99% each time you spend on the card
  • Charges for exchange rate which are usually less competitive as compared to other holiday money
  • The interest each time you take out cash from your card through the cash machines or ATMs
  • Withdrawal fee that can cost around 3% of the amount you took out.

Basically, you’ll usually have 56 days before interest charges apply if the card is used for purchases at your own country.

On the contrary, cards that are intended for foreign usage can bear no fees for cash withdrawals.

Here’s how you can use a credit card abroad

Monthly and Annual Fees

Some credit cards, such as rewards cards, can bear charges that you need to pay monthly or annually, which can be between £12 to £150 a year.

In case, you have a monthly fee, this will be included in your credit card bill.

Getting A Refund

If you’re charged fees incorrectly, you can contact your credit card provider right away and secure a refund. Check on how you can reclaim for card charges on our guide.

Credit Card Limits: How Does It Work?

Your credit limit is the absolute maximum value that your credit card issuer allows you to borrow. You won’t be able to get any more credit beyond this value without being charged fees.

What is a credit limit?

A credit limit is the maximum amount of credit you can borrow from a credit account, such as a credit card. For instance, if your credit card limit is £1,000 and you have used up £500, you technically have £500 you can still borrow, although it’s advisable to stay well within your credit.

Ways to check your credit card limit

You can check the credit limit that your provider has set for you by:

  1. Signing in to your account online or using its mobile up when available
  2. Contacting your card provider in writing, by phone or by mail
  3. Checking your latest credit card statement

Additionally, when you apply for a new credit card, the card issuer will inform you about the absolute limit of your card before conducting a full credit review.

How is your credit limit calculated?

Credit card companies will determine your credit limit through a process called underwriting. This is where they check a few of your credit details. What they check can alter depending on the company, but it generally includes factors such as:

  1. Your income
  2. Your credit score
  3. History of any previous credit cards
  4. Debt-to-income ratio and other details.

How does your credit rating affect your card limit?

Your provider will run a credit review when you apply for a credit card. There are two different types of credit checks providers can perform on you, a soft credit check and a hard credit check.

Soft credit check: Your card issuer or institution will check some of your personal details without leaving any mark on your credit report.

hard credit check: Most providers conducts a full credit check to determine whether they will approve or decline the limit that you prefer. This is where they look at your entire credit history. This will leave a mark on your credit report that lasts six years. Too many hard credit checks in a short space of time can damage your credit score.

Information that providers will check

When your provider scrutinises your credit file, they will check for:

Outstanding debts: they’ll check for debts and their status. This can include your mortgage, credit card debts, and any loans you’ve taken out.

Missed payments: they will also check your repayment history to see if you missed any payments or have fallen into arrears.

Available credit: they’ll check if you have any overdraft or another card.

Typically, the credit card company is evaluating how reputable you are as a borrower. If you’re allowed a bigger credit limit, it indicates that the provider is positive that you stay on top of your payments.

After evaluating all these factors, your credit provider will determine a limit for your credit account. Performing well in a credit check could give you access to a larger credit limit.

Can I raise my limit?

If you’re able to keep your payments regular and pay your balance before it’s due, you can request to raise your credit limit. Most institution reassesses your credit limit every six months. Some may instantly raise your limit while others have to scrutinise if you’re eligible for a higher credit limit. Your provider might have reached out to you and offered the option to raise your limit if you’re qualified.

On the contrary, they can also reduce your limit due to the following circumstances:

  1. Exceeding your credit limit
  2. Missing the minimum repayment
  3. Your credit record is drastically affected by other debts
  4. Your card is not often used

Should I use my entire credit limit?

Despite being able to use all your credit limit, you shouldn’t do. This is because constantly going near your credit limit suggests to lenders that you may be struggling with money.

Eventually, this can weaken your credit score.

It’s said that the ideal amount of your credit limit you should use is around 30%, and you should rarely exceed 50% of your limit if you want to ensure that your credit score doesn’t drop.

So, for example, if you have a credit limit of £1,000, you want to use around £300 ideally, and avoid using more than £500.

Can I go over my credit limit?

You can exceed your credit limit, but you’ll normally get charges when going over your card limit. This can result in you not being able to use your credit card until you pay off the outstanding balance.

If you exceed your limit, it can:

  1. Reduce your credit card limit
  2. Lose any 0% credit card offer you have on your card
  3. Accumulate a higher APR on your card
  4. Have a negative record on your credit