top tips
Top tips on credit card usage
- If you only make the minimum monthly payment, it will take many
years to repay the balance and the amount that you’ll end up paying
in interest will be massive.
- Try to pay as much as you can each month and ideally the whole
amount due. Try to avoid making the minimum payment only
- If you are taking advantage of an introductory 0 per cent
deal, be sure to set aside enough money to pay the final bill on
time.
- Introductory offers are designed to attract new customers. At
the end of the introductory rate, you will be moved to
the standard ('revert to') rate which will be considerably more
expensive.
- It is not unusual to see the benefits of reward schemes reduced
over time or for it to be made more difficult to obtain the reward
(for instance, Alliance & Leicester’s money back scheme).
- Review your credit card on a regular basis.
- When switching cards, it can take several weeks from
application for a new card to arrive, so plan at least one month
ahead.
- Remember that balance transfers, new purchases, overseas
transactions and cash withdrawals may be charged at different rates
of interest.
- If this is the case get two different cards: one for the
balance transfer and another for new purchase.
- If you don’t make full monthly payments, remember that what you
pay is used to pay off the cheapest debt first, and the most
expensive debt last, thereby compounding your debt.
- It may also be worth having more than one reward card to obtain
maximum advantage of the tiered structure on some cash back
rewards.
- Don’t take out payment protection insurance unless you really
need it.Make sure you understand the policy details and that you
are eligible to claim (ie you are in employment, and are not self
employed, unemployed or a temporary worker).