If you must do it, do it carefully

Filed Under  Press Releases  |  Leave a Comment

Not advice from a driving instructor or reference to something of a more personal nature, but equally sound advice to take on board if you are thinking of using credit.

With the use of ‘plastic’ eclipsing cash as the most popular form of transaction, and the nations indebtedness reaching an all time high, there’s no denying the popularity of credit and store cards.

There will inevitably be times of unavoidable crisis and unplanned expense that finds the monthly budget, wanting. Failed washing machines and cars or more serious life events can find a lot of us reaching for the convenience of credit cards to help us weather the financial storm.

Convenient it may be, but is it the best and least expensive source of finance? If you need extra money, explore the options offered by your banks, building society or mortgage provider. It will generally cost you less but interest payments are inevitable.

Interest Free credit offers a great way of saving money on household items, but be sure to comply with your agreement or be hit with the very thing you were hoping to avoid - interest charges.

Another way of avoiding interest charges is that if you do need to use your cards, simply pay back the due amount the very next month.
Yes, blindingly obvious, but all too frequently, opting for the minimum payment becomes an early warning sign, leading to missed payments and the decline into debt crisis. Missed payments can also be read as risk indicators by creditors and adversely affect you future loan applications.

Creditors know theses early warning signs and the predictable pattern that emerges. Fortunately, it’s equally visible for you to see, so self-diagnose.

If missed or minimum payments are part of your way of dealing with debt or if you are paying off one card using another, then you now need to seek some impartial advice.

Whatever you do, don’t be seduced by the advertising of the ‘one-loan-fix’ offered by high interest charging debt consolidation companies. Instead, just open your mail, confront the reality of your situation and get some help and advice.

There are a number of sources of free specialist debt advice including the Citizens Advice Bureau and maybe your employer provides employee assistance or welfare facilities that include debt advice. Organisations such as Payplan also provide free access to qualified debt advisers on a freephone number.

The straightforward advice is to use credit sparingly and ideally, try to avoid it becoming a habit.

There are often lower interest options with both cards and high street lenders, so be sure to shop around for best value - the internet is a great time saver and the personal finance sections of newspapers often contain analysis of the current best loan and card interest rates.

Having a credit card does not mean you don’t set a budget or spending limit, so take some time out, look at your monthly outgoings then set yourself an affordable limit.

If necessary, read the early warning signs - minimum payments are the wake- up call for you to respond to and take control of your finances. Ignore it at you peril.

So, if you must do it, use credit carefully and try and make any mistakes you make small, manageable and affordable.