Posted by Peter Brady on Mon 18th September 2006 at 07:00 AM, Filed in Credit Tips, Glossary
Public Key Infrastructure (PKI) is a computer technology which facilitates secure exchange of information between individuals through computer systems. The system permits trusted parties such as a bank, to issue Digital Certificates to people that need to trust each other. The technology generally operates with the IP address. The purpose of the certificates is for holders to prove their identity. It is possible for them to also digitally sign transactions and documents. Authenticity of the transaction is substantiated by the signature and also proves that the data exchanged has not been tampered with or changed. The same technology is now being used to encrypt data in transit, which ensures that the intended recipient is the only one to have read access.
Note: Digital signatures are now acceptable in a court of law.
Posted by Peter Brady on Fri 1st September 2006 at 07:00 AM, Filed in Credit Tips, Glossary
Donation Cards
Every time the card is used the card issuer donates a percentage to charitable causes, at no additional cost to the card holder.
The ‘charitable cause’ includes recognised charities such as Comic Relief, NSPCC and many other organisations.
Store Cards
These cards are provided by a specific retailer and can only be used with that retailer. There has been much made in the press about the extortionately high interest charges on most store cards.
Interestingly, a recent NOP survey indicated that 75% of store card holders didn’t know the interest rate being charged on their store card. Surprisingly, this is despite only one in three repaying their balance in full each month.
Store cards do offer some benefits if you are disciplined enough to repay balances in full at the end of each month. These include signifcant discounts and privelaged shopping hours.
Gold & Platinum Cards
Not as exclusive as they once were, these types of cards are considered for good credit risk customers, with salaries usually above £25,000.
Benefits usually include a higher credit limit, a higher daily cash withdrawal limit and other benefits such as travel insurance, longer warranties for household appliances, mobile phone insurance and card protection.
There is also perceived status that comes with gold and platinum cards although this has gradually been devalued with their wider availability.
Charge Cards
Charge cards offer an account against which withdrawals can be made to make purchases. Balances must be paid in full each month or significant penalties are accrued.
They can best be described as a cross between a credit and debit card which can be used in the same way as a credit card. Annual fees are normally attributable.
Examples of charge cards include Diners Club and American Express. As with credit cards charge cards often include sweetners such as reward points, cash back or insurance.
There is perceived to be some cue dos associated with these cards in particular the American Express Centurion Black which offers unlimited credit and is by invitation only.
Some businesses use charge cards for staff members. This gives companies an opportunity to closely monitor company expenditure.
Like most credit cards a direct debit can be linked to a current account ensuring that balances are cleared each month.
Smart Cards
These are essentially the future for credit cards. Incorporating minute microchips rather than the ubiquitous magnetic strip makes these cards more secure and able to offer a whole raft of functionality not seen before.
For instance, one card might become multifunctional serving as a credit card and debit card. In effect, acting as an electronic wallet.
Many credit card companies offer various types and levels of free insurance on purchases. These can include:
- Price protection - if you buy something that is later reduced in a sale or you find it cheaper elsewhere, you can claim back the difference, within a specified time period.
- Purchase protection - if you buy something on your card that is lost, damaged or stolen at a later date, you can reclaim some or all of the cost from the card company. This can be useful extra cover for fragile or high-value goods.
- Travel accident insurance - this pays out lump-sum benefits if you are killed or seriously injured while travelling in transport paid for on your card. As there is no medical or baggage cover, don’t confuse this with full travel insurance.
- Online fraud guarantees and Internet delivery protection - stops you from being liable for any fraudulent spending on your account while ‘distance shopping’ via mail, telephone or the Web.
It can vary, but some credit card companies charge an additional fee for insurance cover. Bear in mind that any additional fee devalues the worth of the insurance.
As always, thoroughly check the insurance policy small print for any loopholes or restrictions.
Many credit card offers incorporate complex loyalty reward schemes. However, fathoming how that really translates into value overall can be literally impossible.
Nonetheless, points, cashback, VIP perks and Air Miles are increasingly offered in an effort to attract customers. It’s not surprising that this is happening when you consider all the research pointing towards customers prioritising loyalty rewards as one of the principal factors influencing their choice of card.
Many cards are starting to link up with store cards such as Nectar, Tesco Clubcard and Boots Advantage Card which can really help rack up some worthwhile rewards. Incidentally, Boots Advantage has long been demonstrated to offer the best loyalty rewards, so combining that with a credit card could be a shrewd move.
Common sense tip with all this is that you ensure the monthly credit card bill is reimbursed in full. If you don’t you can forget making any serious gain in either cashback or loyalty rewards.
This term is pretty self explanatory, but in essence you have a period of 0% interest on your credit balance. Most bog standard cards offer this as a matter of course, for periods of 6 months and more on transferred balances. What you really need to keep an eye on is what the interest rate will revert to once outside the 0% period. This can catch you unawares if you forget to pay the balance off, or forget to transfer to another 0% deal elsewhere.
