Free consumer advice site launched by credit card industry to protect shoppersWritten by Richard Green
The banking industry has launched its own new website to provide advice for consumers on credit cards. The site www.choosingandusing.com has been set up to help people choose which card is right for them as well as promoting a better understanding of benefits and problems associated with borrowing using credit cards. The site’s aims are to offer unbiased information to help people decide which sort of credit cards best suit their needs, supply advice on managing money for those struggling with repayments or adverse credit, along with details of any help and support that is available, as well as answering basic questions consumers may have about credit cards. The stated goals are to raise consumer awareness of:
Sandra Quinn, Director of communications at APACS, said: “The UK has one of most competitive credit card markets in world with around 1,500 different cards to choose from, so selecting right one can be a time-consuming process.”
- The benefits and risks of credit card use
- How credit cards work
- What should be considered before choosing a credit card
- How to compare credit card products
- How credit card companies make their decisions
- What to think about when using a credit card
- What to do if you get into difficulties
The site was created by APACS, UK payments association, which represents all of major UK credit card issuers to provide information directed at better education on issues surrounding credit cards to help consumers fully understand their choices, rather than actually comparing specific cards.
APACS commented, “The UK cards industry is committed to improving consumer understanding of credit cards to encourage responsible borrowing. This goes hand in hand with our members’ commitment to responsible lending.”
The website tries to give types of features which people should look for when choosing a card depending on their usual patterns of spending behaviour, such as, people who regularly clear their balance each month would be best advised that interest rates may be of less importance than whether there is an annual fee or a rewards programme associated with a particular card.
Credit Report – How Your Credit Score is DeterminedWritten by Charles Essmeier
Most consumers are aware that they have something known as a credit report that is used to determine whether or not they would qualify for a loan. Fewer are familiar with FICO score, a creation of Fair, Isaac, and Co. which distills their entire credit report down to a three-digit numeral. What, exactly, is this score? How is it compiled? Can anything be done to improve it?
The FICO credit score is used by all three major credit bureaus – Experian, Trans Union and Equifax. They are companies that keep track of credit and lending transactions of millions of Americans. The score is used to provide, in a nutshell, a figure that represents credit-worthiness of a consumer. That score, which ranges from a low of 300 to a high of 850, is used in many ways by businesses and employers. The score is used by insurance companies to set rates, landlords to establish security deposits, and even prospective employers to determine whether hiring someone is a good risk. Despite importance of credit scores in their lives, few Americans understand how it works.
The score is determined by a variety of factors, each of which makes up a portion of score:
Approximately one third of score represents individual’s payment history. Previous loans, and ability to pay them are shown in this portion of score. Both late payments and failure to pay at all affect this portion of score. Those who have paid all of his