Credit Cards

Credit cards have been around for a few years now, and are set to stay around for a while longer.  They are a great invention, how else can you pay for something today when you don’t have the money until payday?  It is possible to get short term loans, like payday loans, or some shops will give credit for larger purchases, but it usually involves form-filling and waiting for approval, and sometimes even ‘arrangement fees’.  With a credit card it is so easy.  Simply swipe and sign, how easy can it get? 

There are many different types of credit cards available, from a huge number of providers, so before signing on the dotted line for the first offer that comes through your letterbox, consider what you are planning on using a credit card for, and how you are planning on repaying it, then find the options available.  It usually advisable to not just sign up with the credit card offered by your bank, there are often much better deals out there.

 Types of credit cards available:

0% Balance Transfer – great if you have a large balance on another card and you are struggling to pay it off, just make sure you check and see if there is any fee to do the transfer, and if there is weigh up the cost to see if it is viable.

No annual Fee –always good to get no annual fee, just check that if you aren’t going to pay off the balance every month, that the monthly interest isn’t higher because of it.

Rewards credit cards – you name, you can get rewards for using your credit card, the most popular being airmiles.  Again, check the small print and see if you are paying extra for this.  Many credit cards make you pay an annual fee to get these rewards so depending on how many airmiles you are likely to accumulate in the year, and whether or not you will actually use the airmiles, will determine if this is the right card for you.

Unfortunately, because it is so easy to use credit cards, it also very easy to get into debt very quickly, with almost no effort at all.  So, before getting and using credit cards, make sure you know the purpose of having a card, and know how you are planning on repaying the credit card.

Whatever you do, don’t just get a credit card, put lots of purchases on it, then pay off the minimum every month.  Doing this will keep you in debt for years, and cost you a small fortune.  If this is you, and you have lots of debts from a variety of sources, including credit cards, you may want to consider a debt consolidation service, just to try and get yourself out of this situation.  Credit cards are one of the most expensive ways to borrow money, so if you are over your head, it may well be possible to reduce the interest payable and make your repayments easier.