Credit Cards: How To Use Them
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Credit cards can be a very quick way of getting into even more debt if you do not know how to use them properly. UK debt is now at an all time high and, excluding mortgages, Credit Cards are one of the main contributors.
It's a lot easier to get a credit card than it is to get a mortgage or a loan. So it makes sense that more people own a credit card. With interest rates that are quite high in relation to loans and mortgages you can see why the debt can get out of hand.
In order to get the best value for money out of your credit card you need to be disciplined in the way you manage your debt.
Make sure you make the payments every month:
If you cannot pay off the whole amount every month make sure you pay at least more than the minimum required. This will help you pay more of the capital off every month. Make sure you take advantage of the interest free periods in this case.
Don't abuse your credit limit:
A credit limit does not mean free money. Credit Card companies are happy to raise your limit if they see you pay off your card regularly. Don't be tempted to use this money it just puts you further in debt and will take you longer to clear it. Credit Card companies know that most people will not be able to resist spending more and you are just helping the big card companies to make more money.
Check your statements every month:
This is a small but important point. Credit Card companies are not perfect and often errors are made on your statements. Make sure all items on your statements are goods and services you have purchased. If you do notice an error contact your credit card straight away. Keep an eye on the interest rate you are charged. If you are on an interest free period make sure you are still not being charged interest.
Know your rights:
Many people do not know their rights when it comes to using their credit cards. Did you know that if you buy goods or services and these are not delivered or are not to the standard advertised then the Credit Card is liable. If you order a sofa and the furniture store goes under and you do not receive your sofa then the Credit Card company has to reimburse you the amount spent. A little tip: If you are paying for an item and it is to be delivered at a future date, always use your credit card as it will be a form of insurance if there is a problem. You can always pay the amount off when the goods arrive if you had planned to pay cash.
For more information on your rights visit:
http://www.dti.gov.uk/ccp/topics1/consumer_finance.htm
Grant Marwick is a freelance writer and owner of http://www.only-credit-cards.co.uk where you will find advice and more articles on Low interest Credit Cards and advice on Bad Credit
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