In 2005 for the first time ever, plastic purchases topped cash purchases. Are we heading for a cashless society where credit cards replace cash altogether? If it's up to the card companies, the answer is an unqualified yes. As consumers get more savvy about handling credit cards and interest, the issuing companies for credit cards are finding their profits from lending money shrinking. In defense, they're trying to cash in by encouraging consumers to use their credit cards for more and more transactions. The current campaign among most of the major credit card companies is encouraging 'small change' transactions, for which merchants end up paying 1-2% processing fees to the company. These 'micropayments' are expected to top 20bn globally. What does it mean for consumers? It means that it is becoming easier and easier to pay for even the smallest purchases with plastic. In an effort to woo the UK credit consumers, many cards now offer cashback rewards for every bit of cash that you spend on your plastic. Paying for everything with a credit card is convenient, easy, allows you to track your expenses and offers you cash rewards for your patronage. Where does that leave the UK consumer who has no credit cards - or is unable to qualify for one of the major rewards cards? There are many options open to even those with damaged credit to take advantage of the convenience and safety of plastic payments. Here are just a few of the options open to you even if your credit score is below par. Bad credit credit cards Most major credit card issuers offer so-called 'bad credit credit cards'. In general, they carry a higher rate of interest than those issued to 'typical' customers with good credit, but as the push to gain more and more market share continues among the card companies, those limits are being relaxed. You'll find bad credit credit cards with APRs as low as 12%, though they may carry an annual fee. Secured Credit Cards Another option available to consumers with adverse credit ratings is a secured credit card. When you apply for one of these cards, you place an amount of money on deposit in the issuing company's choice of bank. That amount stays there to secure any purchases that you make. As long as you pay your accounts on time, it isn't touched - in fact, it will earn interest. You can increase your credit limit by adding more to the account, and eventually as you build a good payment history, you may receive an offer for an unsecured card at a lower rate of interest. Stored value cards If you prefer not to deal in credit, but still want the convenience of paying with plastic - for online payments, for instance - a stored value card could be the answer that you need. Stored value cards are like bank debit cards with a credit card logo - except that they're not tied to any of your bank accounts. You can 'load' the card at a merchant's shop, by mail, via your bank account or another credit card. You'll pay a 'loading fee' to put money on the card, but you'll never pay any interest since you're not actually borrowing money - just putting your own money on plastic. You can find credit card offers and compare them with each other online at comparison websites, which list dozens of the latest credit card offers from all the major companies. You'll also find information to help you make a decision on the best credit card for your uses.
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