Using a card to buy goods or services?

Do you know the relevant features of each type of card and how to decide which is the best for you?

Members of City of York Trading Standards offer the following advice: Charge Cards not a credit card, as you are sent a bill each month which you usually have to pay in full. There is sometimes an annual fee.

Debit Cards these take money directly from your bank account, as an alternative to cash or writing a cheque.

Store cards issued by stores or retail groups to use to buy goods from their outlets. A monthly bill will require a minimum monthly payment or a fixed payment by standing order. You will pay interest if you do not pay back all you owe each month.

Credit card you can use a credit card to borrow money or to buy things straight away and then decide over what period to repay the money you owe, plus interest. You are charged interest on the level of the outstanding debt.

There are advantages to using credit cards, not least that if the goods and services you buy are of poor quality or misrepresented the credit card issuer as well as the supplier is liable if something goes wrong (the cash price of the item being supplied must be over £100 but not more than £30,000).

However, be sure to compare the Annual Percentage Rates (APRs), as the figures vary enormously, and usually the lower the APR the less interest you will pay.

In addition, the Office of Fair Trading (OFT) has recently said that credit card default charges have generally been set at a significantly higher level than is legally fair and that it expected all credit card issuers to recalculate their default charges and to take urgent action to reduce the level of credit default fees.

Do not borrow more money than you can repay, and remember there are sources of local, free, independent advice you can contact to help you sort out money problems.

For further information, or a copy of the OFT's booklet What Type Of Plastic?, phone Consumer Direct on 08454 04 05 06.