If you are not careful and not in total control of your credit-card usage, you are probably throwing money down the drain. You could be paying massively over the odds or being charged enormous fees whilst being blissfully unaware. Spending the time to check your existing cards and researching the best credit card deals currently on the market could save you bundles.
Credit card giants were warned last year to end the rip-offs on interest rates and charges at a Whitehall summit with the Business Secretary. Shoppers and the Government are angry that banks have been putting up credit card interest rates despite sharp falls in the base rate.
One recent study revealed the average interest rate on credit cards has gone up in the last three months from 16.8per cent to 17.2 per cent. That rise came despite the fact the Bank of England base rate has been slashed from 5.5per cent to just 0.5 per cent.
Consumer Affairs Minister Gareth Thomas said: ‘The Government is deeply concerned that borrowers aren’t getting a fair deal. That’s why we’ve taken swift action to bring the industry in to look at how costs are being applied to people’s existing debts.
‘We want to work constructively with industry to draw up a set of principles that will enable them to keep lending and will also ensure borrowers are treated fairly and in a way that best helps them pay off their debts.’
Recent research by the personal finance website, Moneyfacts.co.uk, found that a huge number of companies have put up the cost of using cards since August. Sixteen had increased the interest rate charged on purchases, 12 had put up the rate for borrowing cash.
It seems that just like on mortgages, card companies are factoring in a much bigger margin for the risk of consumers defaulting. The result is rates are going up rather than down.
The best money saving option is not spend on credit card in the first place. You could try one of the Pre-Paid Cards that are becoming more popular. They are pre-loaded with your own money, which you can use wherever the Payment Card is accepted, including the internet and overseas. They are the same as a credit card, but without the credit.
Good news for financial management and even better news if want to add someone else onto your card account without giving them access to your credit. You only get access to what you have paid in and you can track the usage 24hrs a day over the internet. You don’t earn interest on your money but they are a great way of cutting out overspending and the nasty interest payments that brings.
If you have to continue with credit cards make sure that you’ve got the best credit card deals. One of the comparison sites is a good place to start; Beat that Quote are particularly good for Cheap Credit Card Deals .
As a means of comparison, it’s always a good idea to try a few credit card providers direct. Start with your own bank, they are bound to have their own credit card, they know you, know how you manage your account and they may be able to offer a really good card.
Whatever you chose to do, don’t be complacent. Read the full article on TheThriftySaver.co.uk
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