credit CarDs:

• Most of us have them. They can be very helpful or a real money-gobbling trap!
• If at all possible, pay the whole amount of your credit cards off monthly. If you use credit this way, it can actually save you money. Credit cards don’t incur monthly fees (usually just one annual fee), so it’s cheaper to do all your banking transactions by credit card.
• BUT, if you are in the least bit inclined to overspend, don’t get a credit card! Or, if you’re not paying off the whole amount of credit monthly, work at paying your card off and send it back. (Don’t just cut it up – you’ll still be in the system)
• “Revolving Credit” has been a popular way of using credit cards of late. Whole companies have been set up to encourage people to reduce their mortgages by using this system. They charge you for this service, but it’s just as easy to set it up yourself in consultation with your bank. Basically, it works like this:
• All your income goes into your mortgage account. You pay everything by credit card, so as much money as possible stays in the mortgage account. (This way you are paying off more of your mortgage, reducing the total amount of interest you’ll pay).

• Your whole credit card bill is paid monthly (usually by Direct Debit).

• The danger is that it APPEARS you have a huge amount of money to play with (the whole amount of your mortgage). But, if you overspend, you’ll actually end up paying less off your mortgage than if you were on fixed repayments. So, this system is not without danger. If you are very disciplined it does work. We recommend talking to your bank manager. Or contact us for some safeguards.

• Credit card companies work on the assumption that most of us won’t pay off the whole amount owed on our card every month. They make their money by the interest incurred on the remaining balance. You pay quite a high interest rate, so the aim is to pay off as much of the balance each month as possible – not just the “minimum payment”. If you don’t pay more than what is required on the statement it will take forever to pay off your card. Always pay more than the minimum if at all possible.

• Contact us for more information and help with credit cards