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Credit Card Glossary: Credit card

Credit card

Perhaps the symbol of consumer freedom, the credit card allows you to spend whenever you want without regard to what's in your bank account. The cards, issued by all the major banks and many other companies including newspapers, charities and clubs provide flexibility and convenience especially if you're away from home.

Some card issuers will charge you an annual fee, which can range from £8 a year for a Barclaycard up to £375 for an American Express Platinum card*. But there are still many cards issued without any annual charge and some of these are gold cards, provided you qualify.

Credit card issuers tend to belong to at least one major credit card network, e.g. Visa or Mastercard.

The good things about credit cards are convenience and flexibility and in most cases you can enjoy a credit-free period, typically of up to 56 days before interest is charged to their account. But, if you're looking to borrow money, they are among the most expensive options available with annual percentage rates of interest (APRs) which seemingly bear little relation to base interest rates.

*Strictly speaking American Express is a charge card. The outstanding balance needs to be cleared each month.

See also: Financial Services