With the credit crunch impacting on all countries around the world, personal finances are not far from our minds. Many people have been using various offers from credit card companies such as 0% balance transfer cards and interest free cards for a set period. Though with credit in short supply and belts being tightened across many business models are these offers still going to be available and are they still a good idea?
The first question to answer is ‘are they still a good idea?’ In times of financial uncertainty a credit card with good terms can be an excellent way of smoothing out the demands on your finances over a month so you are never short and don’t have to pay large interest payments. If you aren’t clearing the balance every month and are creeping closer to your credit limit, you may be living beyond your means and will need to address this before you reach the limit. Long term borrowing on a credit card is expensive and not the most effective way of borrowing. If you have shifted a balance to a new card with an interest free period you can be saving a good deal in interest but you need to be certain when the period is over or you may have a nasty shock if the balance suddenly starts increasing. Now is also the time to be scrutinising the small print, because even great deals can have less than obvious pitfalls that quite legitimately make the providers more money. For example, check whether new purchases are also interest free or you have to clear the transfered balance first. This will be clearly stated in the contract you sign but the text might not be as large as the headline offer, and let’s face it few of us ever read the small print.
Two options well worth investigating are Supermarket credit cards and Adverse credit cards . As the supermarkets are doing a roaring trade at all times they can afford to be generous with the offers to turn shoppers into financial customers. Adverse credit cards are only worth considering if you have bad credit history and want to improve it. As the interest rates are around 35-40% you would be foolish to consider using one unless you intend to pay off the full balance at the end of every month. Though if you are responsible borrower you can quickly improve your rating and then be eligible for more favourable terms.
The simplest way to find out what is best for you is to use a comparison site like Creditchoices.co.uk here you will be able to view all the options side by side and use the articles on the site to ensure you select the best deal for you circumstances.
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