Credit card management

In light of the tempting offer of free money when you sign up for a free credit card, I was thinking of doing a guide to how to manage your new credit card. Personally, I would use it once and then cancel before the renewal date next year. But if you want to use a new credit card the smart way, this guide from the thrifty scot should help.

Making payments online

Over the last 9 days I've meandered about from site to site, letting you sample some of the plethora of delights the internet offers. From the cheap and cheerful dealextreme*, to sober dabs and the ever useful but downright dull revenue commissioner. In my first post, I promised to cover the basics. To my mind there is a part of online purchases that I haven't gone into enough detail on: purchasing. So, here is a list of ways you can make purchases online, with comments where appropriate.

1. Paypal

THE online payments processor. Owned by and promoted heavily by Ebay. Acts as a proxy between you and a seller, allows you to pay by bank account or credit card. Big. Well known.

The good: It's pretty safe. The seller never sees your credit card details, so they can't draw all your money and leave you to pick up the pieces. Free to use for consumers.

The bad: Their customer service has left a trail of destruction. Don't make purchases over €500 with Paypal or you could be very sorry if things don't go smoothly. Also, they have a convoluted verification process which is a nuisance, but necessary for some sellers.

2. CCNow, WorldPay, RealEx etc.

The other online payments processors. Independently owned. Do pretty much the same thing as paypal and quite often better. Small. Frequently bullied by Paypal in the yard.

The good: Very little difference to Paypal. Don't ask too many questions.

The bad: Again, like Paypal. Lack of verification may give people the impression that they are less secure than Paypal (not true).

3. Credit Card

The standard in international payments. There isn't a business man alive who doesn't understand visa. Accepted by medium to big stores. Most common and easiest method of online payment. Costs €30 in tax to hold one for a year or part thereof.

The good: Reasonably safe to use. Unlikely to lose money if you are a victim of fraud. Easy to acquire.

The bad: If you do get into a dispute, you could be without a working credit card for a while.

4. Virtual Credit Card

Ooh, virtual! Nothing to do with virtual reality. Acts as a pay-as-you-go rechargeable credit card. Not taxed. Suitable for 16+ years.

The good: Same as a credit card. Can only be emptied of the credit that is on it.

The bad: Joining fees and administration charges. Cannot be used on certain websites.

5. Debit Card

Direct access to your current account. Payment is transferred (almost) immediately. Usually specific to a certain country or area.

The good: Convenient. Easy to acquire.

The bad: Not accepted in a lot of places. Not particularly safe.

6. Cheque

Limited access to your current account. Payment is transferred within 5 working days upon receipt.

The good: Easy to acquire.

The bad: Not accepted in a lot of places. Not particularly safe. Slow.

7. Bank transfer

Don't even think about it.

8. Cash

What did I just say?


That about covers it for today. If you have any questions, comments or just want to hang out and talk rubbish, feel free to leave a comment (see below). Comments can be anonymous so if you want to ask a question without giving away your email, go for it!

[Special Offer] €100 for new Halifax customers

Halifax are offering €100 to new customers signing up for a new credit card. Free is always a great bargain!

The deal is:

• Offer applies to new customers only.
• €100 will be lodged to your credit card account after the first purchase.
• Offer ends 31st July ’08.

And remember, government duty on credit cards is €30 per annum.

http://www.halifax.ie/