Saving Money When You Have a Credit Card
Credit cards can be very expensive. Often times we get into a cycle that we just can’t find our way clear of. In this article we are looking for ways to help you save a little money when you have a credit card eating at your wallet. Here are a few statistics to help you. At the moment the typical balance for the UK at the end of each month is 1,860 pounds. At the end of the year if all credit card consumers switched to the cheapest interest rate available they would save in total 400 million pounds together. Imagine what you are paying in interest right now if everyone in the UK could save 400 million pounds at the end of the year. That is roughly 400 to 500 pounds per year per consumer according to the OFT.
There are some very simple saving techniques to use. For example you could have two credit cards. We say this because when you transfer a balance with a deal of zero percent interest for 12 months you don’t want to use it for charges. You could also get a card that is a low lifetime interest rate on balance transfers. A fixed interest rate credit card is your third option for balances. On these balance cards you pay the lowest interest rate first. This means you don’t want to have purchase amounts on the same card. For this you could get a purchase card that also has a deal. For example you might want to get one that has zero percent purchases for 3 months. As long as you can pay off the balance in those three months or every month you would avoid interest. Again if you used the same card to make the purchases you wouldn’t be paying off the purchases, but the balance transfer. It’s also important that you always pay the purchase balance off every month.
In this situation this is how you might want to proceed. If you need a card for purchases you would pay off the purchases in full every month. On the second card with the balance you would pay the minimum balance. This way you are not paying interest at all. Now the key is to be able to pay the balance transfer card off in the allotted time before the interest kicks in. Ideally in this situation you wouldn’t need a purchase card very often, so that you could afford to send more to the balance transfer card.
There is something to consider in this scenario. If you don’t pay off the balance you could find a new card. Keep in mind each time you transfer a balance the credit card company is going to charge a 3 percent fee, sometimes lower, but this is about average. The 3 percent fee is on the amount you transfer, which can be pretty high. However, calculate the savings you make for the fee versus the interest and you usually see a significant savings.
Credit Card Updates June 2008
5 Savings Tips for Credit Cards
Before Taking on a Credit Card
Card Protection System Foiled
Debt and Credit Cards
Early Warning System for Credit Cards?
Credit Card Identity Theft Tips
Photo Identification on Credit Cards
Refunding Money: Credit Cards
Saving Money When You Have a Credit Card
Saving the Planet with Credit Cards |
