Sunday, 8 May 2011

Credit cards can help you manage you spending

Credit cards can be a great tool to help you manage you spending and as addition to your current funds if you have some short terms needs.

Beware of the long term cost of borrowing via a credit card, the cost can soon add up to a significant amount.

You should look at the best deals on the market for a credit card since these change often and the range of charges, interest rates and benefits can vary

An alternative to a credit card can be the use of an overdraft on a current account; these can be more cost effective although often need to be pre arranged with you bank.

Many banks charge different rates of interest on an agreed overdraft (planned) and these are typically lower than an unapproved (unplanned) overdraft.

"Another alternative is a loan, either secured or unsecured."

You normally find a secured loan is lower cost than using a credit card, although this also depends on how fast you planning on being able to pay back you credit card and clear the balance. Secured loans are typically used when the item you buying has a value the lender can recognise, a typical example would be a car loan.

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