Debt isn’t bad, bad debt is bad. Yet in these recession and credit crunch hit times, all borrowing is tinged with the dark side, lose your income and debt will leave you in a nightmare. Therefore before choosing which card is right for you, watch out for the following....
- Want to cut existing debt costs?
You don’t need this guide, which is about cards with cheap ‘purchases’ interest rates for new borrowing. Instead please read the Cheap Balance Transfers guide instead.
- Don’t use cards to supplement day-to-day spending.
The huge worry about credit cards is they allow you to borrow willy-nilly, there's no structure. This is one of the reasons they’re the primary cause of personal debt crisis; many people simply use their cards to supplement their income.
To correctly use a credit card, ensure all borrowing is planned, budgeted for and as cheap as possible. If you’re just grabbing it to ease the strain on your pocket, that's a mammoth danger signal, please read the Debt Problems guide before getting yourself into trouble.
- Have you budgeted and planned repayments?
Always borrow as little as you possibly can. Yet it's not just about how much, but also how quickly you can repay. The quicker you can repay the cheaper it will be. Use the free Budget Planner to help.
- Don’t borrow your way out of debt.
If you’re getting a new card to help ease existing debt, it's likely you’re going to make things worse. The old adage ‘never borrow your way out of debt’ still holds true. If you are having trouble making ends meet please read the Debt Help guide which will take you through debt issues step by step.
- Watch out, lenders bite!
Credit card companies have an array of tricks to bite your cash. If you fail to repay in full, you'll pay interest on the whole amount. Miss a payment, or pay late and you can lose any cheap interest deals, be fined and hurt your credit score. Find out how to beat credit card tricks.
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