Play your cards right

Anna and Geeta take your questions

Anna Bowes from advisers Chase de Vere and Geeta Varma from the Consumer Credit Counselling Service tackle your questions about credit cards.

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Alan King asks: "Do you know of any credit card companies which do not charge an annual fee or a penalty for late payment?

"I don't mind paying the interest charged, but a £25 penalty if I'm a couple of days late with my monthly payment seems unreasonable."

Anna: Cards will charge you a fee for late payment. Some charge more than others - for instance, Tesco will only ask for £10.

It is effectively a fine for not paying up on time.

One way to get round it is to set up a direct debit to make sure you do pay on time.

But you get 30 days to pay, so you should really be able to get it paid in that time.

Mark Trowbridge writes: "Please don't glibly say that people can switch easily from one card to another to avoid paying exorbitant rates of interest.

"I tried applying for a 0% rate balance transfer rate and was refused on the grounds of insufficient income. Is there any way around this?"

Geeta: It's certainly a lot easier these days to switch cards.

But 0% interest cards are not for everybody.

Creditors offering these rates can be very choosy about their customers. They want somebody who's going to generate profits for them.

Make use of the 0% rate but try to pay off the debt in that time, because once the introductory rate is up, the rate is hiked.

The 0% only applies to balance transfers and not to new spending on the account so be careful about that.

Peter Jackson from Reading has heard that credit cards are not cancelled until one year after they expire. Is this true, he asks. Surely that would be illegal?

Anna: While the card can't be used any more, sometimes people will set up standing orders from that card and it's up to them to cancel those arrangements.

Suppose you bought something at Sainsbury's and that didn't got through for a couple of weeks, in which time your card had expired.

You're still liable for that because you bought the goods.

The card company will leave the account open but the card cannot be used.

It's really up to you to cancel any subscriptions that might come off the card.

Mike Atkinson from Middlesex says: "I have just paid off a debt to Barclays that had caused a county court judgement to be on my credit file - it had stopped me getting credit for the last 10 years.

"It looks like the CCJ will stay on my file for six years - is there any way to shorten this time? And can an independent person or my bank make a decision to give me credit based on individual circumstances rather than just looking at my credit file?"

Geeta: Despite what companies say there is no legal way to shorten the time a CCJ will stay on your records.

It will stay for six years unless you pay off the debt within the first month of the judgement being entered.

If you pay it off within that six years, you can apply for a certificate of satisfaction.

That involves getting proof from the lender that you've paid off the debt and then the court will issue the certificate for a nominal fee.

But that doesn't guarantee you'll get credit elsewhere.

There are lenders who will give money to people with a less than perfect credit rating, but you need to watch the interest rates because sometimes those lenders will penalise you.

A viewer who has just started working as a writer and a freelance journalist asks: "When filling in forms for credit cards or any other credit application, what do I put in the employment field, as the options there are for employed, self- employed, student, housewife or retired?

"Also, will my being freelance or a writer affect my credit rating and will I be able to get credit easily?"

Geeta: It's perfectly acceptable to say you are self-employed or a writer or whatever.

But that's not all there is to credit scoring.

The occupation matters but there are other things that are far more important.

You would need to be able to substantiate your earnings. A lender might say they are not sure if they can lend - can you give us proof of earnings, such as a bank statement.

A viewer asks: "Is there anywhere I can list all my credit card details so that if my purse is ever stolen, they'll make all my cancellations for me?"

Anna: There's a couple I know of - Card Protection Plan (0870 120 1251) and Sentinel ( 0800 414 717).

If you register the cards you have with them and your wallet is lost tolen You can make one phone call and they'll cancel all the cards.

Often they'll also order new ones for you.

You'll usually pay about £15 a year.

M Vance says: "A friend of mine is having difficulty renting a flat because a credit reference agency is providing a poor credit reference.

"The person in question has an unblemished credit history (a credit database company has separately confirmed there is nothing on their database to cause a problem).

Nevertheless the credit reference agency is refusing to state what the problem is, and this is frustrating any attempts to correct an error. Can they do this?

Geeta: He needs to get a copy of his credit file. It costs £2 and there are three main credit reference agencies:

Equifax

Experian

Callcredit

He needs to check whether there ise any information on the files which might be affecting the application for the tenancy. If there is he can put a note of correction of the credit file.

Another thing worth bearing in mind is that it's not just the state of the credit rating which determines tencancy agreements.

A landlord is also going to be interested in whether you will be able to pay the rent.

It might be worth getting a letter from an employer confirming salary or copies of bank statements.

Colm McMahon says that when he was on holiday in Corsica, a sign at a restaurant said that for credit cards, a minimum meal cost of 45 euros would be imposed.

Are retailers allowed to set such minimum spends?

Anna: Yes they can and you'll often see in your local corner shop, for example, they'll say the minimum spend on a cheque or credit card will be £5 or £10.

What many people might not know is that every time you purchase something with your credit card it costs the shop money.

So they needto make a decision about when it's viable to take your card.

Declan Osborne from Greater Manchester says: "I have been refused credit by Virgin Mobile. As they use Equifax, I ordered a copy of my credit file, which has almost no information on it whatsoever.

"This is despite the fact that I have a credit card and a loan with HSBC. Unfortunately, even though HSBC consider me to be a good customer and have written a letter to me attesting to that fact, they will not supply my account details to Equifax unless I become a bad debtor.

"So I am in the ludicrous position of being a good customer yet am unable to get credit with anyone other than HSBC. If I try to get a credit history by going to other suppliers I run the risk of being rejected, which has a negative effect on my credit history. What can I do?"

Geeta: He needs to check out his credit file. Not all creditors do provide information to all the reference agencies.

If he's only checked out one, it might be worth him checking out the other two.

If there's nothing deteimental on the file that's not a bad thing. Very little information is better than any detrimental information so he shouldn't be put off applying to other lenders.

If the credit rating is unblemished that's not a guarantee that a lender will offer credit.

As well as the credit file, they use a credit scoring process.

It could be that he might not be listed on the electoral roll or another factor like that.

Also some of the information is coded, so he needs to look at the details they provide you with to help you decipher it.

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The opinions expressed are Anna's and Geeta's, not the programme's. The answers are not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.