As we sit in the midst of a credit crunch, many consumers will have concerns about their finances in one form or another. Uncertainty in the markets has meant a reduction in spending on the high street and increasing numbers of calls to debt advice help lines.
With Christmas just around the corner, many will be looking at methods of saving money - whether it is cutting back on essentials or taking out further financial products in order to help the cause.
Of the financial products available on the market, credit cards are one of the most widely available. These handy cards can help you spread payments on purchases and pay it back over a period of time, which can be useful when it comes to purchasing Christmas presents.
Interest free credit cards are useful for when you need to make big purchases, such as electronic goods, by allowing you to spread the cost over many months without accruing any interest payments.
But if you're not careful, credit cards can bring with them a few pitfalls that can have an adverse effect on your credit rating, as well as increase your debt levels.
And with more companies becoming more stringent about who and how much they lend money too, getting a credit card in the first place is becoming increasingly difficult. If you're not financially secure enough to afford to add another card to your wallet, it's best to think about getting your finances in order before committing to further deals.
As tempting as interest free deals sound, they also come with limits, and a common mistake with credit cards is to go over your limit on the card, which will practically invalidate your 0% interest rate and return you to the usual APR rate. Indeed, this can be more severe in the case of store cards, which usually have a much higher APR rate than many credit card companies, and overspending on these can prove to be very costly if you don't keep an eye on your finances.
Research is a key part of deciding which cards are best for you, by taking the time to analyse your finances and tidying up your credit rating before shopping around for credit card deals you can help increase your chances of a successful application.
If you feel you need a credit card for those little financial emergencies, or are just looking to spread payments, ensure that you pay off your balance at the end of each month. Not only will this help give you piece of mind when it comes to settling your debts, but it will also help to keep your credit score healthy.
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