CreditCards.com

Fine print, Living with credit, New products

UK cards: Long balance transfers, skimpy signup bonuses

Jenny Hoff

Pretty much everything is more expensive in the United Kingdom than in the U.S., including credit cards, but that’s not stopping British shoppers from turning to plastic for purchases. After having written several stories on the lavish reward opportunities that come with credit cards in the United States, I was surprised on a recent trip to London to find that many credit cards in the U.K. come with virtually no rewards or points programs and have higher annual fees than their U.S. counterparts.

Still, even with unattractive credit card offers, the Brits are moving toward becoming a cashless society, with credit and debit cards accounting for nearly 78 percent of retail sales in September 2015. One of my fellow diners at a London restaurant proudly showed me his contactless debit card, boasting about how he could pass it over a reader to pay, though he was quick to point out the maximum purchase allowed using this method was £30, “so a criminal can’t just steal your card and go to town.”

Credit cards with skimpy rewards
Unlike the United States, where you can often score enough points for an international plane ticket with just the sign-on bonus, a card in the U.K. might give you a bit of a cash bonus or a few thousand frequent flier miles when you sign up, and it will often come with an annual fee.

What the U.K. cards typically do offer over U.S. cards are longer periods of interest-free balance transfers and purchases – up to 36 months in some cases. That may help explain why average credit card debt is rising in the U.K. — up 21 percent in January, compared to the summer of 2015, according to a report by Aviva, a British purveyor of insurance, savings and investment products.

Consumers still spend about twice as much on debit cards as credit cards, but 10 percent of adults rely heavily on bank overdrafts to make ends meet, and the Aviva report found the amount owed on overdrafts was up 37 percent compared to summer of 2015.

Traveling to the UK
The important point for travelers heading to the U.K. is you don’t have to rely on cash to get around. In fact, as the popularity of cash dwindles, you might find yourself out in the cold if you try to board one of London’s famous double-decker buses with a purse full of coins instead of a contactless credit/debit card or an Oyster card, the common method of payment for public transport. Cash is no longer accepted on the buses — a relief for busy Londoners who don’t want to wait for tourists to dig out change, but a shock for unsuspecting travelers who haven’t caught up with the cashless times.

So, next time you’re in the U.K., you’ll fit right in with a wallet filled only with plastic. Just make sure you bring cards that have no foreign transaction fees or your bank will tack on extra charges with every purchase.

And, be warned you may get a few confused looks if you don’t have a PIN for your EMV chip card. You can usually sign for the purchase instead of using a PIN, but unlike in the U.S., EMV cards in the U.K. and other parts of Europe are PIN-and-chip cards to secure against fraud. Also, be sure to have your ID ready and to make your signature closely match the one on your credit card — the Brits don’t take credit card security lightly. Other than that, you should be able to spend your way right through the U.K. without missing a beat.

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, we ask that you do not disclose confidential or personal information such as your bank account numbers, social security numbers, etc. Keep in mind that anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.