Can Britain Live Without Credit Cards? Credit Cards and Further Money Products On Offer in the UK
Credit cards are widely used across the globe, and most adults in Britain have credit card debts. According to latest reports on personal debt, every family now has around £40,000. Of course, this does not mean that each and every household has that amount of debt, but certainly the levels are high. Credit cards are a large part of a normal person’s debt although they are becoming harder to apply for.
Since the recession and the fresh stance by the authorities to clean up the country’s financial books, banks and lenders must abide by far stricter regulations regarding borrowing products. The previous government is often blamed for the severe situation in the country, with economic problems comparable with suffering Eurozone nations.
So, should people apply for another credit card when they know that they already have debts to deal with? The fact is, credit cards are hugely vitalfor many areas in modern life: big purchases such as a home can only be made with the aid of plastic money. Many internet companies only accept credit cards, and the same goes for hotels. A large number of merchants do not even take debit cards – therefore, what choice do consumer have?
Fortunately there are countless types of credit cards, ranging from prepaid money cards to exclusive credit cards and business cards. The choice is massive, so the majority of people have an option. For instance, a borrower who has difficulty receiving a loan or other personal credit product at a mainstream bank can now apply for a low credit credit card. This type of card usually has a small credit limit, but gives the holder more purchase power and often there are extra features like a credit builder. This is designed to help the card holder rejuvenate their credit status, although the risk of further debts is constantly there.
Prepaid credit cards (Kreditkarten) are increasingly in demand in the UK, and offer the chance to shop on the internet and worldwide with what looks like a regular credit card. They are even provided by one of the main credit card companies for example MasterCard. However, rather than offer the card user a credit facility, the card can only be pre-loaded with their own money. Once these have been spent, it is up to the card user to re-load the card with more funds. The main advantage of this is that the card holder needn’t worry about landing in debt, as it is impossible to take credit using the card. However, there are a couple of drawbacks. For instance, the majority of prepaid cards do have some fees like purchase fees or monthly administration fees. These are mostly paid for with funds on the card.
