British citizens who are about to go on holiday abroad should consider using pre-pay credit cards as opposed to the traditional credit card products. Industry analysts have claimed that pre-pay cards are less likely to cause serious financial damage if they are stolen or mislaid.

Since pre-pay cards are not linked directly to bank accounts and the holder can only spend what money they have placed on the card, there is less chance that those engaged in fraudulent activity will be able to steal your identity or gain access to your account.

Financial experts also state that this type of card would prove to be particularly useful to university students who ,because of the card’s spending limits, would be unable to rack up serious debt.

The Association of Investment Companies had already reported that students were graduating with debts of around £13,000.

Using a comparison service will assist consumers in choosing the best credit card deals.

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Britons are finding that applying for credit cards via the internet is becoming a far easier process. Online card applications are also proving to be extremely popular because of the time saved.

Traditionally, a consumer would be required to contact a credit card firm by phone and request an application form, which may then take several days to reach the customer. Additional time would also be required to process the form and send a response to the applicant.

The internet provides UK consumers with a wide range of credit card products and information along with comparison services. Another advantage of applying for credit cards online is that you have access to a service that is available for 24 hours a day. You will no longer be asked to call back in office hours or between 9am and 5pm.

The British Bankers Association has reported that around 132,000 card payment transactions occur every 10 minutes.

The SaveOnBills comparison service provides the latest information on the best deals in the credit card market

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With the cost of food and energy set to hit new highs, credit card expenditure is also expected to soar. Apacs, the UK payment Association, has reported that the UK now owes a total of £54 billion on credit cards. The findings strongly indicate that the nation is becoming increasingly reliant on this form of payment for the purchase of everyday products and services.

Britain’s current dependence on credit cards has meant that debt has surged, which inevitably increases the financial burdens that are being placed on individuals and families.

The credit card sector, itself , has become embroiled in the fight against debt. Industry analysts have predicted that credit firms can expect to reclaim around 80% of what is currently owed on cards. Obviously, the remaining 20% will not be repaid which will result in these customers being lumbered with a bad credit rating.

Since there is an increase in the amount of consumers who are unlikely to pay back all the money they have borrowed against their cards, lenders are now seeking to obtain more funds from other customers by hiking up interest rates.

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UK payments industry association, APACS, has reported that credit cards have been used in 2.7 million fraudulent transactions during 2007. This represents a 20% increase on figures from 2006. The data ,which was released in the Home Office’s annual crime statistics report, shows that £555 million was lost to this type of fraud.

Closer inspection of the report revealed that there had been a significant rise in criminal cases that involved the counterfeiting of debit and credit cards. Another alarming crime statistic has shown that criminal use of personal information derived from stolen cards, where the fraudulent user often uses these details to make online purchases, had risen by nearly 40%.

APACS stated that this steep increase in card fraud had been fuelled by criminal activity in other countries that had not yet incorporated chip and pin security measures.

Online shoppers are advised to ensure that they carry out safety checks before releasing card details or any other kind of personal information to websites. Failure to do so could result in the loss of hundreds or thousands of pounds.

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Research conducted by Virgin Money has revealed that holidaymakers who are traveling abroad are beginning to consider using debit cards as opposed to credit cards. The rise in the use of the pre-pay card is seen as a direct response to the credit crunch as Britons are attempting to regulate their spending habits whilst overseas. Virgin also stated that there are around 40 debit cards on the market.

An advantage of the pre-pay card is that it makes it far easier to monitor expenditure as card holders are only allowed to spend the amount that is held on the card.

With the economy in a continuing downward spiral the pre-pay card may prove an effective tool for people who are attempting to cut their financial outlay. However, those who wish to apply for this type of card are warned to always closely examine any associated terms and conditions as there are likely to be monthly charges or one-off application fees.

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Recent research has revealed that the credit card sector is beginning to yield to the huge financial pressures that are being exerted by the global credit crunch. Previously, industry experts had reported that the sector appeared to have remained largely unaffected by the global economic downturn.

However, earlier this year it had been noticed that lenders were implementing measures that indicated that they would pass on any rising costs to their customers. It has been estimated that around 20 credit cards have ramped up their purchase rates whilst several other cards have increased their cash rates. It was also revealed that up to 5 credit cards have also increased their balance transfer costs.

It has been suggested that the move by credit companies to hike card prices will hit many consumers who are now becoming reliant on this form of finance to purchase basic household items and pay for various household bills.

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With more than 1500 credit cards currently available across the UK , consumers are currently spoilt for choice. But even though there are great deals to be had in this era of competitive credit offers, families are being warned that they should not view a card as their only means of finance.

Recent research ,that has been conducted by the Alliance and Leicester Bank, has revealed that homeowners are becoming increasingly dependant on credit card use to fund the cost of household appliance repairs. The lender said that its survey has shown that consumers now use their cards to deal with everyday repairs and other items.

The bank pointed out that the credit crunch was responsible for placing a squeeze on household budgets and consumers are finding that their access to finance is now limited. The current economic situation means that homeowners are now being compelled to rely on their cards in order to address domestic issues.

Alliance and Leicester said that people should be looking at ways to save more money as paying for repairs via credit cards is far too expensive.

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The Citizens Advice bureau has warned that some credit firms are carrying out massive advertising campaigns aimed at offering young people credit cards and loans that they haven’t asked for. These credit companies are aiming their unsolicited financial products at those youngsters who fall within the 16-24 age bracket.

It was found that youngsters were regularly offered store cards that they simply didn’t want. Around 55% of those surveyed found that they had no problem in getting credit whilst over 60% of those polled stated that applications for credit cards and loans should be made more difficult.

Almost 50% of respondents admitted that they were in some kind of financial difficulty that was directly related to defaults in card or loan payments.

Unfortunately it appears that some companies within the credit industry are ignoring the financial problems that they could be imposing on these young people.

It was estimated that the UK’s total personal debt amounted to £1.4 trillion in September 2007.

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According to APACS ( Association for Payment Clearing Services ) ,consumers in the UK purchased £350 billion of goods and services via debit and credit cards in 2007. Of this total expenditure, debit card use increased by nearly 14% which accounted for £221 billion worth of transactions and credit card use rose by 6% to £133 billion.

Payment by card has now overtaken cash usage ( £265 billion ) and payment by cheque ( £190 billion ) during the same period.

Cash transactions only increased by 0.4% with cheque use falling by 1%. With a huge amount of companies offering discounts and extra incentives for those customers who conduct their financial transactions via the internet, the trend looks set to continue.

A spokesperson for APACS stated that debit cards have risen in popularity over the last three years as consumers are now favouring this type of card payment.

A potential reason for the emergence of this mode of payment in preference to the credit card, may well be linked to the fact that the issue of debit card products are not exclusively dependant on a person’s credit status as opposed to the stringent criteria that is applied by credit card firms.

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If you have a poor credit score the chances are you will not be top of the list when it comes to card companies handing out their credit cards. So the question is, what can you do about it?

Firstly, you should try to obtain your personal credit report to find out exactly what your credit history looks like. If your credit rating is as bad as you think, you should not despair. There are a range of credit cards that are especially designed for those who wish to repair their credit history. However, these cards carry a high interest rate. You should only apply for this type of card if there are no other alternatives.

On the other hand you should not repeatedly apply for mainstream credit cards when you know it is highly likely that your application will be turned down. If you keep getting rejected this will reflect badly on your credit status.

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