Credit Cards  – You might not know as much as you think

Credit cards are now a very common way for paying for goods or services, and now many banks and financial companies are offering benefits to people using credit cards for every day purchases in the form of cash back.  However, many people are unaware of the financial dangers that a credit card can bring into your life. Credit card users often get themselves into unwanted debt due to improper usage or more often, a lack of understanding.  The credit card debt cycle becomes harder to break out of the longer it goes on. So, here are a few tips to stay on track with credit card bills.

Interest rates

An unexpected increase in interest rates can really affect your cash flow on monthly repayments. So, it is very important to stay on track and understand how these changes work so you won’t be caught out.  When you first apply for a credit card, the interest rate was most likely flexible for the introductory period; however these interest rates are likely to rise at later time. Therefore, it is important that you are prepared if and when there is an increase in your monthly payments.

APR

A typical APR is what credit card providers will use to attract potential credit card customers. The providers in question will use their APR (Annual Percentage Rate) to compete with rival credit card companies. Therefore, it is vital that you look out for the agreed APR on any credit card so you are prepared for your monthly repayments. It helps to shop around for the best deal available.

Credit rating

To maintain a positive credit card rating, paying your monthly repayments on time is a must.  If not, this can potentially affect your future financial plans such as when you apply for a mortgage, a loan, buying anything on finance etc. Also, if you just keep constantly switching to another credit card or repeatedly applying for credit, this will make you appear irresponsible and thus leads to bad credit rating. Therefore, having a good credit rating is strong indicator of your financial wellbeing and will make your life easier when making financial commitments.

Online booking fees

Online users still need to be aware of how charges are being calculated.  Only a few years ago businesses were attaching some horrendous fees to tickets that were purchased online, this lead to credit card users paying much more than they should. As a result, the government has recently reviewed regulations and online transactions and have tightened up security.

Travelling abroad

When using an ATM overseas with your credit card to withdraw cash, credit card companies will implement a loading fee, it’s an administrative fee when using your credit card abroad.  Typically many credit cards companies charge a fee when you are moving your money from one currency onto another.

PPI’S

These were designed to help consumers meet their agreed repayments in times of financial difficulty. Paying for PPI’S does sound like a logical and responsible thing to do. However, the controversy arose when it was revealed that many credit card users were unaware that they were paying for them in their monthly repayments. Many consumers have now regained their money that they were charged from PPI’S

It is important when taking out a credit card, that you look at all aspects, by following these 6 tips, you will able to on top of your credit card bills.  However, if you need any more speak to an independent financial adviser, these advisers will provide you with financial advice depending on your circumstances.