As Credit Card Debt Spirals What Are The Main Credit Card Mistakes?
The last decade has seen credit card debt mushroom in the UK and while property prices had supported many with large credit card borrowings, this support has started to disappear. But there are ways and means to cut back on credit card use and save money in the short, medium and longer term.
Some of the main credit card mistakes include :-
Withdrawing Cash
Never withdraw cash from your credit card unless you have no other choice! Not only are interest rates substantially higher (25% to 40%+) but until you payoff your original debts your cash withdrawal will still be part of your debt and attracting a higher rate of interest. Cash withdrawals are always the last to be taken from your balance.
Credit Card Cheques
Credit card cheques are very much the same as cash withdrawals and attract the same level of interest and terms and conditions. Again, unless there is no other option you really should think again.
Using Your Card Overseas
We have covered this on a number of occasions only for people to ignore the warning signs and return from their holidays with large transaction charges. Check the small print before you go on your holidays and see what you can expect to pay.
Long Term Borrowing
Each and every person in the UK credit card market is likely to have added substantial debt one month expecting to pay off the debt at the end of the month. It is far too easy to see this short term debt turn into a longer terms arrangement attracting large interest payments. Perhaps in this situation a formal bank loan may be something to consider?
Share this..
Related stories
Check Your Credit Card Terms Before Spending Overseas
The Nationwide Building Society has issued a timely reminder to those UK holidaymakers who are looking to use their credit cards overseas – check the terms before your spend!
The building society has highlighted the fact that over £650 million in credit card fees was wasted by UK credit card holders in 2007, with the vast majority revolving around so called ‘foreign cur...
UK government set to ban credit card cheques
In a major crackdown on the credit card industry it has been revealed that the UK government is set to outlaw the use of credit card cheques. The cheques are often used as an alternative to credit cards where the card itself may not be acceptable by a retailer or tradesperson. However, many people are unaware that these particular types of cheque attract handling charges as high as 3% as well as...
Read MoreShould the regulators have forecast the ongoing recession?
As the FSA releases details of the criteria used in various stress tests amongst UK financial companies, there is a growing debate as to whether the UK regulator should have been able to forecast the current demise of the UK economy as a whole. Even though we are currently in a situation which has never been repeated in the modern era there are various aspects which have appeared in the past, most...
Read MoreGerman Economy drags down the Eurozone
The revelation that the Eurozone economy fell by a higher than expected 2.5% in the first quarter of 2009 has taken many economists and governments by surprise. However the like-for-like figure compared to the same quarter in 2008 shows an even more disappointing 4.6% reduction which is again worse than expected. However, the German economy is giving severe cause for alarm after it fell by 3.8% in...
Read MoreNew state pension unfair to women
18/01/2015 The new state pension, which from April will replace basic and additional pensions for people reaching retirement age, has been accused of being unduly harsh to women by a group of MPs. Under the new regulations, anyone with less than 10 years National Insurance (NI) contributions will not qualify for the state pension at all. This will have a detrimental effect on women who have...
Read More