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Are You Trying to Cut Your Credit Card Debt?

12 Sep

Over the past few weeks many people have given their credit cards a good bashing, using them to fund their Christmas purchases and take advantage of the early sales that were put on by many retailers. Whilst this may have proven convenient at the time it may also have left many of us with high balances on our credit cards, and with Christmas now over we are left to deal with the financial hangover resulting from our Christmas spending.

Most of us are aware that this coming year is going to be a difficult one, with the recession setting in and financial conditions still difficult. With this in mind many may be looking to reduce their credit card debt, and this means dealing effectively with the debt that you may have accrued on your credit card over the Christmas period.

According to reports the first two weeks of January are set to be amongst the busiest of the year when it comes to applications for instant decision credit cards, with many of us hoping to compare credit cards and get hold of a low interest or interest free credit card to help us to manage the debt that we have accrued. However, industry officials have warned that people thinking of doing this will need to act quickly, as the credit card industry is becoming increasingly constricted, which means that getting a suitable credit card later on may be even more difficult than it already is.

You may find that if you compare 0% balance transfer credit cards to switch to a promotional rate you could reduce the amount of interest that you pay and help you to save money. However, officials have warned that if you cannot do this and you have a high interest credit card with outstanding debt on it you need to try and repay the debt as quickly as possible to save money on interest and get rid of the debt altogether.

Those that are already dreading getting their statements and do not think that they will be able to handle their credit card debt need to speak to an industry professional for assistance. One official recently stated: “Many people will look for a new start in the New Year and getting finances in order will be top of the list. If you feel your borrowing is out of control or you are concerned about servicing debts or slipping in to arrears, seek advice.”

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Nice Guy Credit Card Issuers?

12 Sep

The credit card industry has had some bad press recently. Some companies have resorted to secretly increasing customers APR and minimum payments to make themselves more financially able, much to the disappointment of their customers. Credit card owners have never felt so uncertain as what will happen to their credit cards and their money. However, help is now at hand- the government has introduced some new guidelines which credit card companies must abide by, hopefully making it easier for those struggling to pay off their credit card debt.

Struggling customers will now be given 30 days to come up with a payment plan to begin repaying their debt. During this time they have the option to use a free debt advice service, such as the Citizens Advice Bureau. The debt advice service will help you to come up with an affordable repayment plan, and offer advice and guidance wherever needed. During these 30 days, credit card companies are unauthorised to chase you up for payments, whether it be phone calls or sending letters. If an agreement hasn’t been made in these 30 days, the customer then has another 30 days to devise a plan with a debt advice service.

Following the recent uproar, credit card companies will also have to give customers 30 days notice before they can increase their interest rates. This will give customer’s time to either transfer their balance to another credit card, or close the account altogether. If taking out a new credit card, card issuers cannot increase your minimum payments or you interest rate within the first year. After the first year, your account can then be reviewed every 6 months, if necessary, and again you will be given 30 days notice before any changes are made to your account. All of these guidelines were made in January, and will be applicable to everyone who owns a credit card account.

When looking for a good deal on credit cards, always compare what is available on the market. Use an online comparison tool to compare balance transfer credit cards and interest free credit cards. This way you should be able to find a good deal with a low interest rate.

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Will You be Transferring Your Credit Card Balance After Christmas?

12 Sep

With Christmas just around the corner many people have already started purchasing their Christmas gifts and items, and despite the global credit crunch and the difficult financial climate many people have indicated that they will still be spending around the same amount that they did last year on Christmas.

Much of the spending that will take place in the run up to Christmas is likely to be on existing credit cards, as consumers will find it very difficult to get any other finance in the current financial climate and many do not have savings to throw at Christmas this year given the increase in living costs and bills. In fact, officials from the Association for Payment Clearing Services (APACS) estimate that around eleven billions will be spent on credit cards in the run up to Christmas.

If you have a credit card that charges high rates of interest but you find that using your credit card is your only option at present, then it is worth considering the fact that by transferring your balance to a 0% balance transfer credit card once the festive season is over could prove very lucrative, as it could save you a fortune in interest, making Christmas far more affordable.

For those of you that do decide to take this option there are a couple of things that you need to bear in mind. Firstly, recent reports have shown that the number of 0% balance transfer deals has been falling, and this makes it more important to do your research as early as possible and to compare credit cards and apply for your card early on to avoid disappointment.

Another thing to remember is that you should use the new credit card for balance transfers only and not to make purchases. One industry official has advised: “It’s a good idea to be prepared for January by taking out a good credit card deal. But don’t use it for purchases because your payments will always go towards the cheapest debt first. Though some cards with 0% deals extend them to purchases, this is usually only for the first few months.”

Reno Charlton, award-winning writer, shares her financial expertise as a contributing columnist for Credit Card Compare, where you can compare 0% balance transfer credit cards and read the latest news on 0% balance transfer deals.

 
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