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How to be credit card-aware
Tuesday 8th July 2008
There are more than 1,500 types of credit cards to choose from, and the UK has one of the most competitive credit card markets in the world, but it still pays to do your homework when it comes to managing your money.
1 A credit card is a form of borrowing. They’re a useful and convenient way to pay for goods and services. They’ve part of our daily lives. But while they can give you the freedom to buy things now and pay later – it usually comes at a cost.
2 A credit card can give your finances flexibility, but longer–term debt can be more expensive compared to the alternatives. Investigate whether you can save money by taking out a personal loan.
3 When it comes to choosing a card, go for a no-frills one, especially if you are not the type to repay your balance each month. These frills can be anything from air miles, loyalty scheme reward points or cashback. Any financial rewards will be obliterated by interest charges if you don’t pay off your balance in full.
4 Switch to a credit card with the cheapest annual percentage rate available instead of accruing interest on your current piece of plastic.
5 You can save money by having two separate credit cards. Use one for paying off balance transfers at 0 per cent, and the other for spending either at either 0 per cent or a low lifetime (fixed) rate that won’t rise, or indeed, fall.
6 Never, unless it is an emergency, use your credit card to withdraw cash at an ATM. From the day you take the cash out you pay a grossly-inflated APR.
7 If you do get into financial trouble and can’t meet your monthly repayments, contact the credit card company immediately.
Source : http://www.thetelegraphandargus.co.uk