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Frequently Asked Questions - Finance

Credit card

1) Credit cards are issued by banks, building societies and other organisations, for example under the MasterCard or Visa schemes. They can be used to pay for goods and services, or to obtain cash.

• Write in words the name of the person/company on the first line
• Write in words the amount of money to be paid
• Put a line after the amount to stop any additions
• Write the date in the top right-hand space
• Write the amount to be paid in figures in the box under the date
• Sign the cheque with your usual signature

Electronic transfer of funds to your UK bank account ("sending money by wire") - Quick, but expensive

Cheques - A slow method; cheques may take several weeks to clear

Credit card - Withdrawing money from your credit card can be expensive because of high interest charges

Traveller’s cheques - Keep a record of the numbers of traveller’s cheques and credit cards in case of loss or theft

Before a bank, building society or other lender decides whether to lend you money or give you credit to buy an item they will usually look at your credit file or credit record first. This file contains all your borrowing history from the previous six years. The rating you get depends on this information and is different for each person; different lenders may give you different ratings. The lender will use the rating they give you to decide if you should get a loan or form of credit from them.

Why does the lender do this?