What you need to know before you get a credit card

Craig Tebbutt from Equifax UK explains how credit cards work, how to use them responsibly and how to decide which one is best for you. By CAMILLA FOSTER

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GETTING your first credit card is a huge financial milestone, and while it can offer convenience and rewards, it also comes with responsibilities and risks.

Misusing a credit card can lead to debt, fees and long-term credit damage, so it’s crucial to understand how credit cards work before you apply.

Here, Craig Tebbutt, chief strategy and innovation officer and financial health expert at Equifax UK, explains the crucial things you need to know to make informed, confident choices with your first card.

What is a credit card?

“A credit card, first and foremost, is a flexible form of credit to a certain limit,” explains Craig. “Cards get issued, and you get your interest rate and your spending limit applied. You can accrue that debt, and you can pay [it] off either [with] monthly payments or all in one go.”

What is a credit score?

A credit score is a three-digit number, typically between 300 and 850, designed to represent your credit risk or the likelihood you will pay your bills on time, according to Equifax UK's website.

“A credit score is an indication of the information that is on your credit report,” explains Craig. “It gives you an indication of how lenders may then interpret that credit information when granting credit for a credit card.”

You can get a detailed view of your credit report and credit score out of 1,000 on Equifax UK’s website.