Credit Card ’s Talk

How many monthly bills do you get? You may have a mortgage bill, a car payment, heating, electricity, gas, telephone, television, and that doesn?t even begin with your credit card and store card payments. The fact of the matter is that people today have more monthly commitments than ever before. And with all these various bills it is very easy to forget to pay one on time.

Then there is the wholly separate issue of whether or not you can afford all your bills. Sometimes we may simply have over extended ourselves financially and in such situations we may not be able to pay all of our bills as they fall due. And what if you were to lose your job, or become ill or otherwise unable to work? Even if this is only for a short time, you will have some very real problems meeting all your monthly bills.

Penalties

This can be disastrous. First of all most creditors will slap late payment penalties and other administrative charges to your account if you are late. Some may recall or try to repossess assets if they have security over them. This is most serious in the case of your house but can also apply to your car or any other purchase you have made by instalments such as a television, or computer.

How can you provide for such an outcome? Well having some savings is a very good start. This should be able to cushion you for a few months should you lose your job. Then there is the fact that it is perhaps not so wise to rack up so many commitments that you can?t reduce your outgoings at short notice.

Insurance Protection

Another option to consider is payment protection insurance. This can be very helpful and is designed specifically for situations such as these. How it works is you pay an amount extra on top of your monthly bill. This is automatically added to your bill and depends on how much you have outstanding for each bill. For example, payment protection insurance on a credit card might be priced at ?1 per ?100 you have outstanding. What happens then is should you lose your job through no fault of your own, or should you become unable to work due to accident or illness, then the insurance should step in and make your repayments for you so that you don?t fall behind and rack up extra fees. This can be a great assistance to you financially, at a time when you need it most.

Joseph Kenny is the webmaster of the credit card comparison site http://www.cardguide.co.uk/ and also CreditCards121.com for the latest credit cards available in the UK. He also writes for the US comparison site Credit Cards Info.

It is one of the joys of the credit industry that prices of credit, and in particular of credit cards, have continued to fall over the past number of years. Today you can get zero per cent on balance transfers, and even zero per cent on purchases, offers that were simply unimaginable just a couple of years ago. This is all the result of increasing competition in the market place from alternative lenders and banks from abroad, particularly US banks. However, there are still many charges out there and it takes some care and consideration to make sure that you don?t end up paying far more than you should for your credit cards.

The main charge associated with credit cards continues to be interest charged on outstanding balances. This is traditionally how credit card providers have managed to rake in the massive profits that they have become associated with. It doesn?t take much research to discover that the interest rates on credit cards are among the highest on the market. While mortgage rates and personal loan rates can easily be as low five or six per cent, credit cards rates are easily over twenty five per cent. This is due mainly to the convenience and flexibility of credit cards as a source of needed money. If you find that you are carrying over large credit card balances from one month to the next, you are probably paying far more than you need to for your credit. The best way to remedy such a situation is to consolidate this credit.

Debt consolidation loans, typically secured over your home, offer far lower rates of interest. You can then reduce your outgoings to a single monthly figure that allows you to pay off the debt at a reasonable rate.

Another way to avoid credit card interest rates is to take advantage of zero per cent balance transfers. These can be great opportunities and are offered by credit card providers who are ever more eager to increase their market share and add you as a customer. You will benefit from low or zero per cent rates on any balances that you transfer over to the new card from other credit cards. A word of advice however is to make sure you close the original account. This avoids the temptation of racking up further spending and improves your credit rating by reducing the over all amount of credit available to you.

Other charges such as subscription fees are by and large a thing of the past. Some credit cards still charge annual fees on the basis that they offer other rewards or are more exclusive cards but the general advice these days is that you can get just as good results on cards that do not charge these fees so if you are paying a fee, perhaps you will want to switch to a card that is free in this sense.

Late payment fees and other penalties are incurred if you fail to keep up with your repayment obligations and you should make every effort to avoid these as they are completely unnecessary.

Joseph Kenny writes http://www.CardGuide.co.uk, which offers some of the best credit cards in the UK. Also included in the site are more credit card articles.