Help and Guides

Credit card guide

Credit cards guide

A simple guide with some useful information about credit cards

Understand the basics

What is a credit card? 

A credit card is a way of borrowing that lets you buy things up to a pre-arranged limit and pay for them later, either in one go, or by instalments.


You can buy things in the same way you use your debit card, but the difference is that debit cards use money from your bank account, whereas spending on your credit card means borrowing money from your card provider.


Every time you spend on the credit card, the amount will be added to the card’s balance. That’s the total amount you’ll owe.


Credit card can be an expensive way of borrowing. You should try to pay your balance in full every month. If you don't do this, you will be charged interest on your balance, unless you have an introductory offer. If you can't make a full balance payment, you should try to pay the minimum payment. Missing a payment all together can result in interest and charges and is likely to affect your credit score.

What is the representative example? 

The representative example is an indication of typical costs attached to the credit card. You can see an example below.

It shows the rate you may be charged on purchases, any annual fees and the ‘Representative APR’ of the credit card you’re looking at.

The ‘Representative APR’ shows the annual percentage rate that’s used to work out how much it costs to borrow money. It’s used by banks and other credit card providers to illustrate the overall costs you’ll pay when using the card. The APR includes any upfront fees charged by the lender, spread over the period for which you borrow the money.

In some cases, the credit limit and APR will vary from the example shown, depending on the lenders credit assessment of you.

What is a balance transfer?

A balance transfer is when you move a credit card balance from one credit card provider to another, often with a lower (or 0%) rate of interest for a set period of months.


You may wish to consolidate existing credit and store card debt by transferring your existing balances to another new card with a lower rate of interest.


Typically, you can request balance transfers up to a total of 95% of your available credit limit, although this varies depending on card provider.


This type of offer could help reduce your monthly credit card payments and/or clear your debt quicker, but it’s important to note that there may be a fee to transfer a balance and you should consider the costs you will pay when any introductory offer expires.


If you currently hold a balance on a credit card and want to get an indication of how long it will take you to repay the balance, use our credit card repayment calculator.

What is a credit score? 

Your credit score is used to help lenders decide whether to lend you money, how much to lend to you, and sometimes, how much interest to charge. Credit is used for more than just credit cards – you might need it to buy a house, apply for a loan or get a mobile phone contract, among other things.


Lenders can access a credit file that gives them information about your borrowing. If you want to see your credit file to help with your financial planning you can request a copy (the statutory report costs £2) from a credit reference agency such as Experian.

Your account conduct will have an effect on your credit score, so it's good to have knowledge of how you're doing.


There are a number of ways your credit score can be negatively impacted. We have included some key examples below:

·         Applying for credit too often

·         Always having a big balance on your credit and store cards

·         A history of missed or late payments

·         Missing credit card or loan payments

·         Failing to pay your mortgage on time


Remember, if your credit card company gives you a limit that's more than you want, or if they increase it without you requesting it, you can ask them to lower it. This is a good way to avoid the temptation to spend.

Which credit card is right for me? 

There are a number of different types of credit cards on the market. It can be overwhelming when it comes to choosing the right one that fits with your budget and your needs. 


Incentive based credit cards

Some credit cards offer incentives in return for spending money on the card. You may be offered points, cashback or vouchers by the credit card provider. If you plan to repay your credit card balance in full each month, these types of cards can be really worthwhile. However, you should always consider the APR and cost of interest associated with the credit card as well as any incentives.


Travel benefit credit cards

Some credit cards also offer additional travel benefits, like no foreign transaction fees or additional insurances. This may be advantageous if you’re a regular traveller and you want to keep costs at a minimum.


Low rate credit cards

Low rate credit cards could save you money in interest when making purchases. Always consider the APR associated with each card to understand the overall cost for comparison.


Student credit cards

If you're at college or university and have a student account you might also consider student credit card to help with your day-to-day finances. This type of credit card typically has a lower credit limit, and may also provide additional incentives depending on the credit card provider.


You can see a range of Royal Bank of Scotland credit cards by visiting our credit card comparison page.

Find out if you're eligible for a credit card

Simply enter a few details into our eligibility calculator, and we’ll show you how likely you are to be accepted for a Royal Bank of Scotland credit card. It takes just 2 minutes and has no impact on your credit rating.

Use our eligibility checker


Not sure which type of borrowing is right for you?

If you need to borrow money and you are not sure which product might be right for you, use our helpful tool to compare the features of different types of lending.

Compare your borrowing options

Ready to choose a credit card?

Browse our range of credit cards and easily compare the features and benefits of each credit card side by side. 

See our range of credit cards

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