Credit Cards

Usually, applying to a lender is the only way to know if you'll be accepted for a credit card. Yet that marks your credit file, and could affect your ability to get future credit. Our Eligibility Calculator uses a 'soft search' to calculate and show your chances of acceptance before applying

You'll need to pass a credit check to get a credit card. This lets the lender work out how 'risky' you are to lend to, and takes into account your income and other financial commitments. It can then either accept or decline you.

The criteria differs between lenders – you could be accepted by one but declined by another. So it’s better to use an eligibility checker to check your chances of acceptance before applying.

If you go on to apply, any application will leave a mark on your credit report, even if you’re declined, which could affect your ability to get credit in future (this is especially true if you make multiple applications in a short time period). Read our guide to how credit scoring works for full info.

Credit cards are useful if used well, but can be costly and damaging if used badly. The main advantages are that they:

• Can offer cheap borrowing or rewards

• Let you spread the cost of a purchase

• Let you transfer expensive debt to 0% (if you get a balance transfer card)

• Give you extra protection on purchases

• Can boost your credit history when managed well, meaning you're more likely to be accepted for credit in future.

The main disadvantages are that they:

• Can lead to a build-up of debt if you can’t afford to repay what you borrow

• Charge interest if you don't clear your full balance each month

• Can damage your ability to get credit in future if you miss repayments - this is why we say to always pay at least the minimum repayment each month.

Read more about the pros and cons of credit cards.

APR stands for ‘annual percentage rate’, and is is used by lenders to tell you the cost of borrowing.

Where credit cards are shown as having a 'representative APR', it means only 51% of successful applicants must be given the stated rate. The other 49% could get a different rate (usually higher) – and some people will be rejected altogether.

Lenders must tell you what the APR is before you sign a credit agreement.

If you have a card at a special introductory rate (for example a balance transfer credit card at 0% for 28 months), you won’t pay the APR during this time. And if you pay your credit card off in full every month, you won’t pay the APR either.

Read more about how interest rates work.

Most credit cards come with a ‘variable APR’, which means that the interest lenders charge on borrowing (ie the outstanding balance on a credit card) can go up or down, depending on market fluctuations. Your lender will have to tell you if they plan to change your credit card APR.

You can get also 'fixed APR' cards, where lenders guarantee that they won’t raise or lower the rate for a fixed period of time, although these are less common and are usually have higher interest rates.

Read more about how interest rates work

Credit scoring is a process used by credit card companies and other lenders to decide whether or not they want to lend to you. This process is largely based on information they get from the credit reference agencies – Equifax, Experian and TransUnion – who hold information about your credit history. They will also use data from your application form, and information from any accounts you've had with that financial firm in the past.

Broadly, it means that if you’ve a history of repaying debts in full and on time, you’ll have a better chance of getting accepted than if you’ve a history of missed payments.

Read more about how credit scoring works and how to check your credit report for free.

If you miss a repayment, or don't make the minimum payment amount on your credit card bill each month, you'll typically be charged a late payment fee of around £10, and it will be marked on your credit file for up to six years. This could mean your ability to get credit in future takes a hit.

You could get rejected for a credit card for a number of reasons – it’s a murky business as lenders are not required to tell you why they've decided to turn you down. It could be down to you having a bad credit history, or if they think you'll be risky to lend to.

Unfortunately, if you're rejected for a credit card this will usually have an impact on your credit score – especially if you make multiple applications in a short space of time. That’s why we suggest using our credit card eligibility checker to check your chances of being accepted for a wide array of credit cards, without endangering your credit score.

Although in the UK you can't technically get a joint credit card, you can usually opt to have additional cardholders linked to your credit card account (most often a relative or family member). But as the main cardholder, you'll remain solely responsible for the debt, regardless of who's done the spending.

So think carefully before adding any additional cardholders. If they go on a spending spree, even without your permission, you'll be the one responsible for making the payments and clearing the balance.

You can find out more in joint credit cards explained.