Credit Cards
For a great many of us the money runs out before the month does and then the temptation to use our credit cards to pay the bills kicks in.
This is the beginning of the debt spiral and just what the credit card companies are counting on.
When your next pay hits the bank part of it belongs to the credit card company. If you pay the full balance on time –Brilliant- you’ve used their money for free. However if you only pay the minimum they start to charge interest at very high rates.
To put this in perspective if you run your credit card bill up to £3000 then only pay the minimum on average you will pay them £8400 in order to clear the bill!
If you send your payment and it clears just 1 day late they will charge you between £15 and £18 every time it happens
If you pay 1 day late and you are also £1 over your agreed limit they will charge you between £30 and £36 every time it happens.
Is that a licence to print money or what?
Swapping to other cards that offer lower rates can be useful but after the cheap period is over what have you gained?
Using your credit card to make payments due on your loans is crazy because you are paying 2 lots of interest.
Our debt expert Wally Stone is an authorized intermediary and has over 20 years experience in dealing with personal debt.







