Tuesday, July 29, 2008

Credit Cards Bring Festive Cheer

Christmas is almost upon us once again and the worry of meeting the demands that it has on our finances comes to the fore. Many will get themselves into a level of debt that they cannot sustain and if it’s paid for with your current credit card or god forbid a store card, then the expenditure will be worse with the addition of the interest charges that come with your plastic.

Use your credit card wisely…

This does not mean we should be avoiding using our plastic over the festive season, far from it, as apart from having the cash to pay for your goods and leaving you without any debt, the credit card is the next best thing in getting your gifts, festive food and drink in, without the interest being a problem.

So how do you fancy getting all of this and interest free for nine or twelve months? Well if you need that bit of breathing space and the Christmas period sorted interest free, then taking advantage of one of the credit card that are offering a 0% introductory offer on purchases. These will help ease the burden and will give you up to 12 months to pay it off, or in other words just in time for Santa coming back next year!

Keep clear of store cards…

Doing it this way rather than using your current credit card will mean that you could save around £75 in interest payments if you spent in the region of £500, which is being claimed that as a nation we spend on average per person. Do not use a store card to make any purchases as the majority of these credit cards come with an APR as high as 29.9%.

Other methods that you could use to accommodate your Christmas shopping could be an overdraft, but always remember to speak to your bank first, as going in to the red without the permission of the bank, will only see you face charges that could see you having to pay a hefty interest of almost 30%.

Use a 0% credit card

So the best bet to deal with Christmas this year is to take advantage of a 0% on purchases credit card and budget for what you will have to pay back each month, so that when the 0% period is over, you will have a clear balance and no interest payments to meet, before you have to start dealing with next year and starting all over again.

So get applying now and have your Christmas sorted and worry free before the big day is upon you.

Friday, July 18, 2008

Credit Card Minimum Payments Create Debt

A credit card minimum payment means that you can spend more and pay as little back as the credit card issuer will allow you. Sounds great in theory but it is a system that will turn out to be your worse nightmare. If you stick to it before long you will find that you have reached your limit, have nothing left to spend and all the while your past purchases are totting up interest charges. These sequence of events make your minimum payments so high, that you can only afford to pay back the interest charges and your debt remains the same, with no light at the end of the tunnel as to how you are going to clear it.

This is where the credit card companies have gotten wise and by reducing the minimum payment steadily from 10% on original credit cards to the 2% that most now have set, they have seen a way of making as much profit from you and I as possible. By reducing the minimum payment to such a low level, they have given the customer a false picture on how much they can spend on their credit cards and how much they can really afford. With the minimum payment now sitting at 2%, those who cannot clear their credit cards in full each month, will now see interest charges being added to interest charges, as their balance increases month by month.

To reduce your debt stop using your credit card

This is a position that many find themselves in and by noticing it early on you could be saving yourself a lot of grief and a good bit of money. If you are there at this point, then the best thing that you can do is to stop using the credit card altogether and start to look at ways to reduce your outstanding debt. Even if you find that you have to cut back on other expenditure, you should deal with a debt that is a drain to your finances and by saving now on a few luxuries it will be to your advantage. As you pay off you balance quicker you will save more in interest charges.

Always remember that by paying minimum payments and minimum payments only, you are playing a very dangerous game with your hard earned cash. So why should you work many hours a week just to feed the profits of a bank or credit card issuer, who will be your friend until such a time you cannot afford to pay back the cash that they let you borrow.

Take action today!