Nationwide's message to anyone set to use a credit card this year

Nationwide's message to anyone set to use a credit card this year People are being urged to be extra cautious if they are making any changes Nationwide has issued a message on its website to anyone who is thinking about getting, or using, a credit card this year. The building society writes that "before you increase your credit card limit" there are a few things to consider such as how long you want to pay it off, and the risks involved. Remember that this limit will depend on your personal circumstances such as your income, outgoings and credit file. Nationwide reassures customers: "We won’t increase your credit limit unless you ask us to. A higher credit limit could give you more flexibility. However, it may increase the risk of you taking on too much debt. "This could cost you more overall, and take longer to pay off your borrowing. Consider carefully if you need a higher limit." Nationwide notes that you can apply to increase the limit on your credit card or apply to reduce the limit on your credit card. It explains: "If accepted, you'll get your new credit limit immediately. "But once your credit limit has changed, you'll have to wait 6 months before you can apply to increase it. You can reduce your credit limit at any time." What is a credit card? Explaining what a credit card is, it notes that "it can be a convenient way to manage your money. It allows you to pay for goods and services on credit and spread the cost over time. "When you use a credit card, you are borrowing money from your card issuer. Credit cards are usually issued by financial organisations such as banks and building societies". What is the difference between a credit card and a loan? While both credit cards and loans are forms of borrowing money, however, a credit card gives you a spending limit that you can use as needed. You can either pay the full balance each month or pay it off gradually, but you may be charged interest if you don’t pay in full - unless there’s an interest-free offer. In comparison, a loan gives you a fixed amount of money upfront, which you repay in regular instalments over a set period, usually with interest, until it’s fully paid back How do I choose the right credit card? Nationwide urges people to think about why they want it and how they will use it. This is because different credit cards have different features. Some popular reasons for choosing a credit card are to: - Reduce the cost of existing debt - Spread the cost of large purchases - Worldwide commission-free purchases - Improve credit score - Clear debt but also spend - Receive cashback and rewards "Once you decide on the purpose, you can compare offers", it suggests.