Credit cards. Do you have one? Do you use it? Is it ever good financial management to use a credit card?
I am going to admit that our credit card has dug us out of a financial hole in the past, but it also put us in one.
However, over the last few years we have been learning to use our credit card correctly, well in a balanced way. Ss in collaboration with TSB, I am sharing my thoughts on credit cards.
Make all your regular payments on time and if possible pay off your credit card balance in full if you can.
Set up a direct debit to make payments off your card on time, every time. We have all been guilty of forgetting. Missed payment stay on your record for six years.
Why do I need a credit card?
I know it might sound odd, but there are benefits to be had from credit cards, including the peace of mind of having an easily accessed line of credit should things go wrong.
One of the most important benefits of a credit card is that it offers you consumer protection. Anything you buy with your card which costs between £100 and £30,000 is protected under section 75 of the Consumer Credit Act, which means the card issuer is jointly liable if something goes wrong. Under the more recent Consumer Credit Directive, this same protection is topped up to £60,260.
So, if the shop you’ve bought something from goes bust, or your goods turn out to be faulty, you should be able to claim a refund through the card provider. Debit cards don’t have this protection.
I talked about how you can improve your credit rating before and believe it or not having a credit card can help with that. As you can prove that you are a good
We have also used our credit card abroad. If you want a card for use on foreign holidays or trips look out for one that doesn’t charge you for overseas use.
What to do if you are already in debt and need help.
If you are reading this and looking at adding to debt that you already have and can not afford to pay back, then stop now. Do not look at getting an additional card. There are organisations that offer free debt counselling, including Citizens Advice Bureau, Consumer Credit Counselling Service, now called Step Change Debt Charity and National Debtline (www.nationaldebtline.co.uk).