Interest rates may be low, but the rate of APR credit card companies charge rarely budges. To make matters worse, people use credit cards to the financial advantage of banks. Avoiding doing a few of the things listed below will help save a small fortune over the coming months.
Buying from Insecure Sites
Leaking credit cards and personal information can be devastating and it is very common now if you don’t shop from secure sites. Always do your due diligence and search about the company and website’s reviews before buying anything. It is always recommended to buy online from the CVV shop.
Credit Card Cash Advances
Not only will a customer be charged a higher rate of APR for a credit card cash advance, but he will also be charged an additional fee of 2% just for the privilege of withdrawing the money. Money paid at the end of the month towards the outstanding balance usually goes towards paying off the lower interest-bearing debt first.
Using Credit Card Cheques
The banks don’t provide checkbooks with credit cards because they are kind and benevolent, they do so to make money. As was the case with cash advances alluded to above, those who use credit card cheques are penalized in the exact same way.
Gambling Using Credit Cards
Almost all credit card providers treat gambling transactions as a cash advances. This is because they realize that those who gamble are vastly more likely to default on credit agreements and are trying to discourage it. There are ways to pay off gambling debt more quickly.
Using Credit Cards to Manage Long Term Borrowing
Credit card debt happens as a result of people not paying their monthly balance in full. It is possible to get low-interest unsecured loans for as little as 8%, yet so many people leave thousands of pounds of debt sitting on their cards charging as much as 15% or greater.
Not Taking Advantage of 0% Balance Transfers
Financial institutions offer a number of introductory 0% balance transfer deals that last for as long as 12 months. Making a transfer can save hundreds of pounds, yet relatively few actually take advantage of this.
Using Credit Cards Abroad
Having a credit card to use abroad is convenient, but it can prove costly. It is important that a check is made with the card provider to see what charges will be incurred. The most common cost is an administrative charge for foreign currency transactions. Some people take a cash advance when abroad and this leads to further charges.
Paying a couple of days outside of the grace period may not seem like the end of the world, but it is a sure-fire way to incur a £12 charge. Knowing when bills are meant to be paid or setting up a direct debit would go a long way to solving this problem.
Exceeding the Limit on a Credit Card
Most people don’t realize that they are close to the credit limit and banks kindly provide a buffer to “prevent embarrassment”. They provide this buffer because they like to charge people for using it. Buffers can be as little as a few pounds, but the charge for going over the limit is exactly the same.
Always remember that credit card finance is amongst the most expensive ways to borrow money. It should only be seen as a convenient way to pay for things before settling in full at month-end. If financial problems are an issue there are several debt-free solutions to assist people to get on top of their finances.