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Credit Cards
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Spotlight on

Tuesday, 23rd December 2008

Bank of England interest-rate change
On the 4th of December 2008, the Bank of England again reduced their interest rate (often referred to as the 'base rate'), to the lowest level since November 1951.

But, what does that mean for customers?

Managing your borrowing

Would you like to know what credit scoring and APR really mean? More important, do you understand why you need to know about them?

These articles will help you:

  • work out the cost of borrowing money, including explaining the jargon often used
  • understand how you will be assessed when you apply to borrow money
  • know where to get help if you are having problems paying back your debts

Quick intro

When you are looking to borrow money, understanding interest rates and charges is important as it will help you to choose the best deal. Understanding terms like Annual Percentage Rate (APR) will enable you to assess and compare what's on offer and choose the right deal for you.

How will you be assessed?
Before lending you any money, all banks, building societies and credit card companies will want to do some checks on you. This is called credit scoring. Understanding how credit scoring works may help you to improve your credit rating. This may be particularly useful if you are having difficulties getting credit.

Borrowing wisely
Just because lenders encourage you to borrow money, it doesn't mean that you have to. Only borrow what you think you need and can afford to pay back. However, if you do find that you start to have problems with your debt, getting help sooner rather than later is important. For example, debt-counselling services can help you talk to the people you owe money to.

Find out more

We've put together a short list of resources you may find useful. This is a cross-section to start you off, but you may want to do some more research. Some of these resources are on other websites, so you need to be aware that the FSA is not responsible for content you find on these websites.

Users can rate articles with between one and five stars; this is not an FSA rating. But we have marked the articles 1-3, based on how detailed they are. If you are looking for a very quick introduction, look for level 1; if you are ready to find out more, go for a 3.

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 FSA Recommended
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 Detail (1 = basic, 3 = advanced)
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Articles

Direct.gov.uk - Credit cards and debt
A very useful article on credit cards and debt plus tips on how to avoid problems.
Thesite.org.uk - Boost your credit rating
If you are having trouble getting credit here are some tips on how to boost your credit rating.
CCCS.co.uk - Consumer Credit Counselling Service
Worried about debt? The Consumer Credit Counselling Service can provide you with free confidential advice and support.

Budgeting tools

Moneymadeclear.fsa.gov.uk - Debt test
MONEYmadeclear logo
Loans, credit cards, mortgage payments, bills - should you be worried about what you owe? Our debt test will help you find out how likely you are to have problems with your borrowing over the next year or so.
Thisismoney.co.uk - Credit card reality check
thisismoney logo
This calculator will show you just how long it's going to take you to clear your credit card balance.