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Archive for Store cards

Ways To Save

Friday, June 15th, 2007

With more people falling into debt and finding it hard to keep up with living expenses and other financial obligations, we should all consider taking a different approach to things and find different ways to save money.  A budget is possibly the single most important way of controlling debts.  With a budget you will be able to cut back on unnecessary cost and meet your monthly financial obligations.  However, a budget will only work if you are dedicated and stick to it.  If you already have a budget in place and want to save more, here are some simple things that you can do to help reduce your costs and save:

  • Consider a pay-as-you go mobile.  If you find that you are not using up all the free texts and minutes on your mobile contract, then you are wasting money and should consider a pay-as-you go mobile.  With a contract you can pay as much as £50 a month to your mobile phone company which adds up to £600 a year.  With a pay-as-you go mobile you may pay as little as £30 a month and only pay for the odd call when you need it.  You can save over £100 simply by switching.
  • Cut your home phone bills by switching providers.  Although BT may seem like the only company providing the service, there are in fact several cheaper alternatives from cable companies that include a telephone in the package with broadband internet access.  It is worth checking out other services and finding out just how much you can save.
  • Save on petrol by using public transportation.  As the price of petrol has gone up it will easily put a hole in your pocket if you are simply using your car to get to and from work when you could just as easily use the bus or train.  Not only is public transportation often quicker, but it can also become cheaper, especially if you end up stalled in traffic for long periods of time with your engine running.
  • Consolidate debts: if you are holding a number of different debts – a personal loan, an overdraft, a handful of catalogue accounts and a store card – you will certainly save many by taking out a consolidation loan. A cheap loan can attract an interest rate of as little as 5.7%; compare that to the 30% APR charged by a typical store card and you will see how you can pay off debts quicker and cheaper by putting them all into one place.

Posted in Balance transfer, Borrowing, Budgeting, Consumer Credit, Consumer debt, Credit Card, Debt Consolidation, Debt management, interest rates, Personal debt, Personal loans, Savings, Spending, Store cards, UK Finance | No Comments »

Ways To Reduce Credit Card Debt

Thursday, April 5th, 2007

Credit cards have become so convenient, that we don’t think twice when we pull it out to pay for our purchases.  As convenient as credit cards may be, if you do not control your spending you may find that your credit card purchases will quickly spiral out of control.  With high interest rate, penalties, fees and continued spending, your debt will accumulate much faster than your ability to pay it off.  If you find that you are slowly falling down the path of bad debt, then consider taking a few steps to regain control of your credit.

If you are starting to feel overwhelmed by your debt it is easy to let your bills pile up unopened, but ignoring your debt will not make the problem go away.  If you understand just how much you owe on your credit cards then you will find it easier to control your finances.  You will want to start by making a list of exactly how much you owe for each card, and what the interest rate is on each credit card account.  Once you have listed all your credit cards, you will then want to list your cards in order of highest rate to the lowest.

Once you have organised a list of what you owe on your credit cards, then you will want to start off by making additional payment on the cards with the highest interest rates.  These are the cards that will cost you the most in the long run, so you will want to pay off these high interest rate cards first.

One thing that you can do to help reduce your debt is by ringing your credit card company and asking them if they can give you a better rate than what you currently have on the account.  It never hurts to ask.  Often if you mention that you have been getting offers in the mail for cards with lower rates, the credit card company will probably authorise a lower rate, as they would rather lower your rate than lose you as a customer.  If, however, they do not lower your rate, then you may want to consider using a different card.  If you are approved for a credit card with a 0% introductory rate on balance transfers, then you will want to take advantage of it and switch cards as this will help you reduce your debt quickly.

If your outstanding balance is significant (over £5000) you may find it easier to arrange a secured or unsecured personal loan.  Even if you need a bad debt loan (because of missed payments or past CCJs) you will probably find the interest rate charged on a loan is lower than that on your card(s). Making regular standing order payments to clear a loan not only sees you clear your debt quicker it can also improve your credit rating. When making payments to clear a credit card it is often tempting to make only the minimum payment or to put more purchases on it, keeping you effectively in debt to your card company forever.

Posted in Bad Credit, Balance transfer, Borrowing, Consumer Credit, Consumer debt, Credit Card, Credit record, Debt Consolidation, Debt management, Financial products, interest rates, Personal debt, Personal loans, Secured loans, Spending, Store cards, UK Finance, Unsecured loans | No Comments »

Store Cards

Friday, March 9th, 2007

There are many types of credit cards available on the market, such as charity credit cards, gold credit cards, platinum credit cards, and store credit cards.  A store credit card is a card that is issued by a shop or retail chain that can only be used in that shop or retail establishment.  Today many people own store credit cards and find that owning a store card has its advantages and disadvantages.

You will often see in big retail stores an advertisement for their store credit card, offering you a discount on your purchases when you apply and are approved for their card.  However good this may seem, it is often a way to lure customers who would have otherwise been better off without it.  On average, store cards charge a higher interest rate when compared to a standard credit card.  Often these rates can get as high as 27%, if the cardholder is not careful.  Many times a store will advertise a variable interest rate on the card, and slowly increase the interest rate.  Companies are required to notify cardholders of any increase in the interest rates, and many companies do so discreetly through what may appear to be an advertisement in your monthly statement.  Many people who own store cards are not aware of what their current interest rate is, and it would probably surprise them if they checked, as they would probably be charged a higher rate than what the initially started off with.  It is wise to be wary of any offers made by store cards, and if you intend applying for one be sure to read over the terms and conditions before signing anything.

If you do own a store card, there can be some benefits attached to it if you pay off your full balance every month.  Often a store will offer you benefits such as discounts to exclusive card holders, there are also some stores that will restrict the first few hours of a holiday season sale to card holders only.  However, you must remember that these benefits are only beneficial if you pay the full balance on the store card every month, otherwise you are simply using an unsecured loan with a sky-high interest rate.

Posted in Borrowing, Consumer Credit, Consumer debt, Financial products, interest rates, Spending, Store cards, UK Finance, Unsecured loans | No Comments »

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