Credit card debt – a friend or a foe
Nowadays, with all the alarming debt bells ringing, credit cards are being given a negative rap. Are they really all that bad? Do they lead us into debt and push people toward bankrutpcy, or are they only as dangerous as the hands that they fall into?
Could you live without your credit card?
Imagine life without your trusted plastic friend by your side, you would have to struggle to find the right amount of cash for everything. If you were out of pocket until payday, essentials like groceries would have to be put on hold leaving you to survive on beans, beans and more beans for what seems like an eternity! If only you had £25 to spare! Luckily enough, in this debt obsessed world, credit cards are quick to come to the rescue and bail you out.
Credit card debt can be good debt
Due to the negative stigma associated with credit cards, many people find it hard to believe that buying items on credit can actually improve their credit rating! Credit card purchases are particularly beneficial for first time home buyers as a long term record of regular monthly repayments will help to gain a mortgage lender’s trust.
Interest is only as high as you make it
Many people believe that credit cards accrue high interest charges but if you are sensible, borrow within your means and repay the full balance each month; you should never incur any interest on your purchases. If you fall behind with a monthly repayment, you are requested to settle the outstanding amount by a set date. It is only after this set date that you will incur a much higher interest charge.
Useful Links:
Free debt advice is available from many websites. Debt Free Direct also runs a free helpline.
Finance News posted on 30/05/2007 15:59:23
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