credit cards

Credit Cards - The Power of the Plastic

There is no denying that we are a credit-based society. More and more people are relying heavily on credit cards to fund both everyday and major purchases; for many consumers their "plastic" is their favourite shopping partner.

A recent survey by the Office of Fair Trading produced some worrying findings. From a sample of nearly 1900 people, 70% owned credit cards and of those people surveyed, more than 75% did not know what interest rate they were paying!

Getting the Most Out of Your Credit Card

Anyone with a credit card is more than aware of the convenience factor; but to get the most out of your credit, you need to be on the ball. By paying for a purchase using a credit card, you will simply delay the payment falling due. You are billed on a monthly basis, therefore, if you time your purchase correctly, you may benefit from anything up to one month, interest free, before you have to part with your cash.

Several credit cards now offer a 0% interest for a period and it is possible to transfer your balance, continually, to new credit cards that offer these introductory periods. This means, in theory, that you will never pay any interest.

Potential Pitfalls with Credit Cards

One of the main problems is when a user fails to pay off the entire balance owing, on a monthly basis. By paying only the minimum amount, you will simply be paying the interest and your actual balance will never decrease, fully. If you are looking for more long term lending, then contact a loans provider as interest rates on credit cards rarely make them the best long-term option.

If you are making the most of 0% interest periods, then make sure you stay on top of your diary! These companies may have a shorter interest free period than you expect and they are unlikely to remind you when you are about to run out of time!

Try to resist the temptation of having multiple credit cards, as this can make it easier to rack-up extensive debts and lose track of when payment is due.

Credit cards are a great way of spreading large purchases, but stay informed and get organised, or it could cost more than you imagined.

Credit Cards