HSBC Bank scooped the prestigious title of Best Credit Card Provider at the YourMoney.com Personal Finance Awards 2024. Here are five common credit card myths debunked.
HSBC UK won Best Credit Card Provider at the YourMoney.com Personal Finance Awards 2024 – the second time it has won this category after scooping the title in 2021.
As part of YourMoney.com‘s special award winner spotlight series, Madhu Kejriwal, head of unsecured lending at HSBC UK, debunks five common credit card myths.
Five credit card myths debunked
Credit cards are often surrounded by myths and misconceptions that can deter us from using them effectively. However, they can help to facilitate purchases, restructure existing lending or earn rewards.
Knowing what’s true, and what’s more of a myth, is a great place to start when thinking about how to use a credit card. Here are five common credit card myths debunked:
Myth 1: There are no benefits when paying with a credit card vs paying with a debit card
Using a credit card can offer a number of benefits when managed correctly. You receive a standard interest-free period when you pay off your credit card balance in full each month by the due date.
This allows you a certain number of days to make purchases where interest won’t be charged, allowing you to buy something and pay back later when you don’t have the funds immediately available.
You also benefit from extra protection under Section 75 of the Consumer Credit Act when you buy goods or services with a credit card.
If you pay for something between £100 and £30,000 with a credit card, your purchases are protected if the supplier breaches its contract or misrepresents the goods. This means you’re covered if the product is faulty or doesn’t match the description, the product or service is not delivered or the supplier goes out of business.
Some credit cards also allow you to earn reward points, air miles or cashback on your spend.
Myth 2: You only need a single credit card
Different credit cards offer different benefits, such as 0% interest on purchases or balance transfers, travel benefits or allowing you to earn rewards.
Having more than one credit card can support in meeting different needs, such as having a credit card offering 0% interest on purchases to facilitate a large, planned purchase and a rewards credit card to earn rewards on everyday spending.
It can also provide the flexibility to manage your finances by keeping other balances separate from your everyday spending.
Myth 3: You can only find out if you will be accepted after completing a lengthy application and hard credit search
You might be worried that the only way to check whether you are eligible for a credit card is to complete a lengthy application and that it may negatively impact your credit rating.
However, it is possible to check your eligibility before you apply, without impacting your credit rating. It can also help you to understand what credit card products you could be accepted for.
Our HSBC Credit Card eligibility checker can help you understand what products you could be eligible for from our credit card range.
Myth 4: You can only use UK credit history when applying for a credit card
Newcomers to the UK can leverage their international credit history when applying for a credit card with HSBC UK. Customers can choose to share their credit history from a growing list of 12 countries, including Australia, Brazil, Canada, Dominican Republic, India, Kenya, Mexico, Nigeria, Philippines, Spain, Switzerland, and the US.
Myth 5: You should only use your credit card in the UK
Your credit card can be a great travel companion when on holiday or travelling abroad.
It can help you to manage your spending and can be more convenient than organising travel money in advance or trying to find an ATM.
Some credit cards also include travel benefits such as airport lounge access, hotel discounts and earning air miles on your spend.
However, credit card providers may charge you a fee for currency conversion when used abroad. If used to withdraw cash abroad, you may also be charged a cash withdrawal fee.
Madhu Kejriwal is managing director and head of cards and personal lending for HSBC UK across all its brands.
HSBC UK serves over 14.7 million active customers across the UK, supported by 23,700 colleagues. HSBC UK offers a complete range of retail banking and wealth management to personal and private banking customers, as well as commercial banking for small to medium-sized businesses and large corporates. HSBC UK is a ring-fenced bank and wholly owned subsidiary of HSBC Holdings plc.
