Don’t be a soft credit card target: latest deals

Always remember when you’re dealing with any financial institution that you are a ’sales target’. Although banks may use flattering terms like ‘valued customer’, they really mean you are simply a potential cash cow.

When creidt card providers increase your credit limit without asking you, offer you a so-called ‘prestige’ credit card, or send you unsolicited credit card cheques what they are simply trying to do is to persuade you to spend more and that means borrow more from them, so that you will pay as much interest as possible.

Equally critical as a source of income for credit card issuers is Credit Card Repayment Protection (CCRP), which they try and get you to buy every time you take out a new card. You should remember that this is entirely optional as an insurance policy that will make your monthly repayments if for reasons of accident, sickness or unemployment you are unable to work. It also pays off your outstanding balance if you die. The problem with CCRP as offered by Credit Card providers is that is hugely over-priced and policies come with get-out clauses, small print and jargon. If you really want to have protection against the potential problems mentioned, then shop around for a stand-alone income protection policy, which you will be able to use to cover all your essential monthly expenses, including your mortgage repayments – not just your credit card repayments.

Don’t be tempted by marketing speak in the credit card bumpf. For example, credit card cheques usually come with literature suggesting how much easier life would be if you used them to pay off other bills, or that you deserve a holiday after all your hard work or how a new kitchen would increase the value of your home.

Do everything you can to avoid becoming their favourite type of customer - known in the industry as a ‘revolver’. A revolver is someone who borrows heavily and regularly, and usually makes only the required minimum payments. He/she never manages to fully paying off their credit card. A revolver is great for a credit card provider because they eventually owe a lot of money in interest.

Notoriously now, after recent attempts to batter them down, card issuers also charge you penalties and fees whenever possible: withdrawing cash, paying late, exceeding your credit limit, asking for duplicate receipts or statements and so on. Although many of these charges jhave come down in recent months it is still advisable to check carefully before doing (or asking your lender to do) anything unusual, and try to avoid making costly mistakes.

Here’s a look at some of the latest credit card deals on offer, including many of the fees payable as discussed.

The Barclaycard Platinum 14 month BT Mastercard/Visa credit card has a typical APR of 14.9%. It is offering a 0% balance transfer for 14 months with a transfer charge of £2.5%. Its minimum monthly payment is 2.25% or £5. Cash withdrawals are charged straight away at 2.5%. Foreign use of the card costs a fee of 2.75%. The charges for late payment, returned payment and exceeding a credit limit are all £12 each. There is also 0% interest on purchases for three months. You can also write Barclaycard credit card cheques, but they come with a fee of 2%.

Capital One is offering 0% interest on all balance transfers and on all purchases until 1 May 2008. After that the APR is typically 9.9%. Balance transfers also come at a competitive fee of only 1.7%.

The Virgin Money MasterCard offers 0% interest on balance transfers for 15 months, but with a high transfer fee of 2.98%. Typical APR is 15.9%. Minimum monthly payments are 3% or £25. Cash withdrawals are charged at 3%. Cash withdrawals are charged straight away at 2.5%. Foreign use of the card costs a fee of 2.75%. The charges for late payment, returned payment and exceeding a credit limit are all £12 each. Your Virgin Credit Card gives you instant discounts all over the shop. You can get money off your holidays, wine, music, DVDs, car insurance … simply by paying with your Virgin Credit Card.

The Halifax One Credit Card is offering 12 months 0% interest on balance transfers and purchases. Balance transfers come with a 3% fee. The typical APR on the card is 15.9%. Cash withdrawals are charged at 3%. Cash withdrawals are charged straight away at 2.5%. Foreign use of the card costs a fee of 2.75%.

MBNA’s Platinum Plus card has 0% interest on balance transfers until September with a 3% transfer fee, and 0% on purchases until December 2007. The typical APR on the card is 15.9%, with minimum repayments of 3%. Cash withdrawals are charged at 3%. Cash withdrawals are charged straight away at 2.5%. Foreign use of the card costs a fee of 2.75%.

Issue of all cards depend on customer’s credit rating and age (usually 18).