Monday, 24 June 2013

Tips for credit card use.

Family life can be a juggling act at times, busy and complicated.  Family finances can be especially difficult to juggle, you have to take into account all bills and living costs when budgeting and make sure you can get the money to stretch for the whole month until the next payday.  For most families their budget is very tight, with only just enough money to cover bills and basic living expenses.  With restrictive budgets even the best budgeter can struggle when faced with unexpected bills.  Many families who are already struggling with their budget and then are hit with unexpected bills are looking at credit card options to help them deal with unforeseen costs.

The topic of finances, debt and credit cards is a delicate issue.  Even though we would all love to have no money worries and live a debt-free existence this is only a dream for most of us and with the number of families struggling financially and living with debt increasing every year poor finances and money worries are sadly a fact of life for most of us.

When unexpected bills hit or the money did not stretch quite far enough until payday people have to resort to using their overdrafts, borrowing money from friends or family and using credit cards.  I do not think credit cards are a way to manage debt but the sad truth is that for a lot of families it is a welcome way of getting things they really need and dealing with unforeseen bills when the family money is already spent, especially when borrowing money from friends or family is not an option and the overdraft has already been spoken for.  Even though credit cards are often thought of in a bad light there is nothing wrong with having to get one, in fact it is becoming more common that families have to get a credit card as a rainy day fund back-up, the simple truth is that credit cards need to be used sensibly.

I would never lecture anyone about their finances and I can only dream of knowing the answer to living a money worry free life however I do have some friendly tips if you do go down the credit card route.

*  Compare credit cards online to find the best credit card and deal for you. 
Make use of comparison sites to compare the vast range of credit cards deals on the market to find a card that suits your needs. 

*  Consider introductory offers on credit cards.
Take advantage of offers that credit card providers offer such as 0% balance transfers, 0% interest on purchases for a set period of time or reward points, if the card is right for you.  If you get a credit card with an introductory offer and plan on keeping the card after the offer ends think about the charges in interest and fees that will come into effect once the offer ends.  If you have an outstanding debt using a credit card offering 0% balance transfer will help you pay off the debt without incurring interest.

*  Pay your balance.
Try to pay off your balance in full each month or at least as much as you can afford.  Make sure you do not miss a payment, which incurs charges and if you cannot pay the full balance or more than the minimum amount pay at least the minimum.

*  Set up a direct debit.
With life being complicated it can be easy to forget to make your payment so if you set up a direct debit for at least the minimum payment each month you won’t miss a payment and incur charges.

*  Try not to overspend.
It can be hard to resist the temptation of using your shiny plastic to spend lots and live thinking ‘I’ll pay it off later’ but to try an prevent building up a large debt that you struggle to pay off make a budget, stick to it and resist the urge to go on a shopping spree.

Credit cards can cause more problems than they solve so be cautious and responsible.  When looking for a credit card consider what you need and want from the card and take into account what you can manage so that you do not end up with a huge limit that tempts you into a spending spree that you cannot afford.  On the other hand credit cards can be helpful and help you cover unexpected bills and purchases as well as helping on particularly tight months where the money has not stretched quite far enough until payday for groceries and utility bills. 

For free, unbiased and independent advice about credit cards and all money matters see the Money Advice Service website.

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