Choosing a credit card
When it comes to credit, making an informed decision is important
This section will give you a much better understanding of the things you need to take into consideration before choosing a card.
Annual Percentage Rate (APR) - tells you how much your borrowing will cost over an average year. It takes into account interest that will be charged as well as any extra fees you will have to pay (such as any annual fees). The APR can help you to compare credit cards in an easy and fair way.
Balance transfer - is the process of transferring a balance from one credit card to a different credit card. Balance transfers can help you combine all your debts into one place. You may also be offered a promotional rate which helps to reduce the cost in the short term. Normally you will be charged a fee for this type of transaction. After a promotional rate has ended the balance will always go back to your standard rate, which will normally be higher.
Fees and Charges - Credit card providers may charge fees if you use your card for:
- cash transactions
- non-sterling transactions
- balance transfers and money transfers
- They may also charge a fee if you request a copy of a statement
You could pay an annual fee just for having a card, even if you do not spend on it. You may be charged more than one fee for a single transaction. For example, for a cash transaction in a foreign currency we charge both a cash transaction fee and a non-sterling fee.
Keep in mind that we do charge interest on fees, except annual fees, purchases during the interest free period and default charges. So you know, no interest will be charged on default charges within the first 28 days from the time you are notified that these are to be paid. After this time interest will be charged.
Default charges may apply if:
- you miss a payment
- Your payment is not received on time
- your payment is returned unpaid.
Types of card
Credit cards can fall under a few different categories. Understanding these will help you to decide the type of card you are looking for. Here are some of the types of cards that we have to offer.
A purchase card is often used for buying everyday goods or services. It may have an introductory offer which can be useful if you make a large purchase. When the introductory offer period ends you will be charged your standard rate. You will be required to pay the minimum payment on time each month.
Combined cards may have introductory offers for both purchases and balance transfers. A balance transfer lets you transfer the balance from one credit card, where you may be paying interest, to another. It can also be helpful if you want to make a large purchase in order to spread the cost for a promotional period.
Reward cards give you something back when you spend on the card. Each time you shop you can collect points and use them to get shopping vouchers, cashback, travel and more.
Reward cards do not usually have a low APR. This means that they would benefit people who spend around £350 or more per month on their credit card. If you tend to spend less than £350 per month then you may not earn as much in Rewards to cover the Annual fee that Reward cards normally charge.
A Low rate card may be useful if you don’t want to worry about promotional periods ending as it has one interest rate.
A Balance Transfer card can help reduce the interest you pay on your current credit card debts. This type of card lets you transfer all or part of a credit card or some store cards (if they have the Visa®, Mastercard® or Amex® logo) balances onto a new credit card. You may receive an introductory offer. You may receive an introductory rate. When this introductory rate ends, the balance that remains on your account will start to be charged at the standard rate of interest.
What does it mean for me?
Your biggest commitment is to pay back what you borrow plus any interest charged and stay within your credit limit. Each month you must pay back at least the minimum amount on time. This amount is shown on your statement. Please read your credit card terms and conditions carefully so you understand how your credit card works.
Even if your card offers a 0% interest period on purchases, if you do not make the minimum payment on time each month, you will be charged interest on top of your purchases. If you only pay the minimum each month, you will end up paying more interest over a longer period of time. It will also take more time to pay off your balance.
Interest charges will apply on balance transfers (outside of a promotional offer), credit card cheques or cash withdrawals made on your credit card even if you pay off your balance in full.
If you miss or make a late payment, you will be charged a fee. To help avoid this fee, you can choose to pay between the minimum and full amount by Direct Debit each month. Missing a payment could also have a bad effect on your credit rating. This can make it hard to get credit in the future.
When we make a decision to lend, we consider a number of factors, such as credit history (i.e. if credit card payments have been maintained and how long the current account has been held), current level of borrowing and financial commitments.
If successful, you will get a credit limit and any applicable promotional rates, which will be based on your current status.
At least 51% of successful applicants will receive the representative APR. You may be offered a different promotional period, rate or product which will be based on your current status. Please check all the features of the credit card to make sure that they still meet your needs as they may differ from the card you applied for first of all.
Important legal information
Lloyds Bank plc. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065 Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.Visit the Lending Standards Board website
We may monitor or record telephone calls to check out your instructions correctly and to help us improve the quality of our service. Calls from abroad are charged according to the telephone service provider’s published tariff. Not all Telephone Banking services are available 24 hours a day, 7 days a week. Please speak to an adviser for more information.
How much we lend and the issue of a credit card depends on an assessment of your circumstances. You must be 18 or over and a UK resident to apply.
Terms and conditions apply to all Lloyds Bank credit cards benefits. Full details will be sent with your card. After each introductory period ends you will be charged at the appropriate standard rate.
Mastercard® is a registered trademark, and the circles design is a trademark of MastercardInternational Incorporated.