Tips For A Freeloader Credit Card User
Before you panic, there was a time when a freeloader UK credit card user was considered the perfect customer.
Freeloader card users always pay their outstanding credit card debt in full on the statement payment date, never carrying a balance. They use their card sensibly, making sure they get the maximum loyalty bonus points possible. And, they never cause the credit card issuer a problem. You may well be left thinking, then, what is wrong with being a freeloader?
Truthfully the answer would be “nothing”; however, UK credit card providers cannot make a profit from you if you are a freeloader user and so are changing their policies slightly to make sure that you become more of a profit centre than you were previously.
Changing UK credit card provider policies
To try and bring freeloading credit card users firmly back into the fold of being profit centres, the following are some of the changes that UK credit card issuer are making and which you need to be make sure are not applying to you:
- Introducing annual membership fees. Rising administrative costs means that more and more credit card providers are considering introducing annual membership fees. Fortunately the UK credit card market is still sufficiently competitive to mean that this is a rare and last resort, but keep and eye on this.
- Reducing the ‘interest free’ repayment period. Previously most leading UK credit card providers gave their cardholders around 56 days of interest free credit, i.e. the time between a purchase and having to make repayment for the purchase to the credit card company, on any purchase they made. Today some credit card providers now offer a much less attractive 42 days, so another one to watch.
- Charging interest on ‘cash’ withdrawals. As any good credit cardholder will know, most credit card providers have always charged interest on cash withdrawals. However, many card providers have now introduced quasi-cash products, such as credit card cheques, which they send to cardholders unsolicited and which they treat as a cash transaction. So, if you get an unsolicited credit card cheque from your credit card company, be careful to make sure that you won't be charged the standard cash rates if you take them up on their offer.
- Finally, if your credit rating is too good, and none of the above looks like it is going to work, current practice seems to indicate that card issuers are simply turning down applicants in favour of more profitable applicants who they don't consider ‘freeloader’ card users.
Is there nothing you can do about this?
As a good and prudent credit card user you’ll be glad to hear there are a number of actions you can take to make sure you avoid any of the storm-arm tactics being carried out by credit card providers. These include:
- Checking the terms of you agreement carefully
- Always reading any material sent to you by the card provider to make sure that no amendments to the terms are being made without you knowledge
- Always keep a track on your credit card billing date
- Hunt around for card issuer who do not charge annual membership fees
- Transfer your account to another credit card provider if you think they’re offering better terms, rather than apply to them directly. This should reduce your chance of having your application refused.
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