Credit cards were once the most popular form of paying for items for the large majority of people. Credit cards have many advantages in that they allow the purchaser to use the credit function to access goods or services with the option to repay whatever the cost of the purchased goods at the end of the month. Swank advertising along the lines of, “your flexible friend” was commonplace within the United Kingdom around the mid-1990s. Ask any pre-millennial person what your flexible friend means and I would wager that they would immediately say it refers to a credit card. But just how flexible our credit cards and can literally be your friends? The answer to this is absolutely not; although it could be argued they do provide flexibility in that the majority of credit cards can be used much anywhere both within the United Kingdom and indeed the world. If a person must go on holiday then a credit card would be able to be used in almost any shop abroad.
Advantages of Credit Cards
There are therefore many advantages when considering the use of credit cards and it goes without saying many people have relied on credit cards to cover short-term financial commitments. Although there are therefore positives associated with your flexible friend, caution should be taken when using credit cards to purchase items, or to use it to access small sums of money. As with any credit, credit cards have to be repaid at the end of each month. If the credit card is in repaid in full then interest is applied to the amount that has been borrowed against the credit card. Paying off the amount you borrowed on the credit card is however easy said than done. Consequently, any purchases on the credit card that on repaid then roll over to the next month where additional interest is added.
Many credit cards will offer 0% balance transfers and this can be extremely useful if you have a large amount of debt on one particular credit card. The process for transferring the debt to another credit card is quite simple; he would simply complete an application and to the amount of money you would like to transfer to the new credit card and then this would automatically happen typically within seven working days. An important thing to remember here is that if you are in the process of transferring your credit onto a 0% from one in which you are paying interest that the next thing you need to do is to immediately cut up the card that you transfer the debt from and never use it again if possible. Accruing several credit credit cards can ultimately lead to financial difficulties and therefore the key is to move the debt from the credit card that you are paying interest on to one in which you pay no interest for the agreed period of time.
Credit card interest rates are currently on the rise. The amazing deals that were once on offer pre-2018 seem to have dissipated and there are only a few major credit card providers that are able to provide low interest interest rates on purchases. Here at ELMAG finance we will be watching the market closely and will be reporting back on any significant trends in credit card interest rates.