Approval of Credit Card Applications

If you want a credit card you must make an application and give details about yourself and your financial situation. Usually you can apply for a credit card when you reach the age of eighteen. The card issuer checks the application to see it meets consumer credit regulations and its own conditions. The most important thing they are looking for is that the applicant has sound enough finances and isn't at risk of becoming overly indebted. Applications for credit cards may be refused if they do not meet these conditions. It is illegal to issue a credit card if this will lead to the applicant becoming overly indebted. In the interests of both the cardholder and the card issuer, applicants’ creditworthiness is carefully checked.

Settling Your Balance

There are two ways of paying off your credit card balance: You can either pay the entire balance at once or pay it back in installments.

Paying off the full balance

It’s best to pay off the full balance at once. You can allow this to be paid automatically from your account (by direct debit), or pay it using a deposit slip or through internet banking.

Paying by installments

If you wish to pay your bill in installments, your credit card provider will set a minimum amount to pay back each month. But it’s better to pay back more than the minimum amount each month so you can keep interest payments low. The exact conditions for paying by installments can be found in the terms and conditions and are different for each type of card.

M...MasterCard installements guide

Credit Limits

All credit cards have a credit limit: this is a limit on the amount of money you can take out on your card. When you reach the limit you will not be allowed to make any further purchases or draw out any more money. The credit limit is set when you apply for your card, and depends on your financial situation, your credit history and your card issuer’s own conditions, among others. The available credit limit changes if you choose to pay off your balance by installments. Your credit limit will be reduced by any amount you have outstanding.
 
When you’re traveling, payments for hotels and car hire are deducted immediately from your credit limit, so you can quickly exhaust your balance. Therefore we recommend that before you travel or go on holiday you increase the amount of money available to you by making a payment larger than your monthly bill. By doing this you can give yourself more leeway within your credit limit. It could also be a good idea before making major purchases with your credit card such as buying furniture.

On the other hand, you could choose to voluntarily lower your credit limit for safety reasons or to better control your budget.

Further Information

ZEK (Central Office for Credit Information)

IKO (Information Office for Credit Information)