Are you putting Easter on credit?
There are many people at the moment who may be thinking about getting a credit card, and this is because there are a number of things that they may be planning to put on credit over the coming months. Whilst some people may already have credit cards they may be looking at finding a card that offers better value for money than their existing cards. Others may be considering a credit card for the first time.
With the Easter holidays just around the corner many people may be considering getting a credit card to pay for this. Parents may be looking to fund entertainment for the kids, such as days out, via a credit card. There are others that will be heading on holiday over the Easter break, and will be planning to pay for the holiday and purchases whilst on holiday with their credit cards.
It is also worth bearing in mind that the Royal Wedding is coming up in the next few weeks, and some patriotic people will be determined to head to London to be there for the big day. Again, this is something that is likely to cost a fair amount in transport and hotels, which is why many people will use a credit card to fund this trip.
Whatever your reason for needing a credit card it is important to think carefully about the type of card that you should get. This way you can make the most of your credit card spending and get the best value for money simply by choosing the most suitable and appropriate card.
If you only plan to use the card as a very temporary measure and will be repaying the cash within the standard interest free period then you will find that a rewards based credit card is a good choice. This will allow you to earn something back for using the card, such as points, air miles, travel rewards, cash back, and more. You won’t have to worry about interest rates on the cards because you won’t pay interest anyway.
On the other hand, if you are planning to spread the repayments on your spending over a lengthy period then it is worth looking for a 0 percent purchase credit card. These offer a generous interest free period within which to repay the balance, so you can spread the repayments without being hit with interest charges.
Pay off high interest credit cards before other unsecured debts
One industry group has recently advised consumers who are looking to tackle their debts to look at repaying their credit cards before other forms of unsecured finances because these are often the debts that come with the highest interest rates. Consumers often have a range of debts, such as credit cards, overdrafts, and loans, and some decide to throw any spare or extra cash that they have at reducing one of their debts.
Anyone that is thinking of doing this is advised to check the interest rates being charged on their various debts and then tackle the one that has the highest interest rate, which in most cases is the credit card or store card. Throwing extra money at debt can help to reduce the interest and the term of the agreement but consumers need to be careful that they do not put the money towards a debt when they actually have another debt with higher interest rates.
Consumers can easily check the rates of interest that they are being charged on their different forms of credit so that they can work out which one to pay extra towards first. Those that do not have this information to hand can simply contact the provider to get the information and work out which debt to tackle first. The industry group stated: “That way your money is working harder because you are spending less time building up the debt on the highest interest rate.”
Another option for those with high interest credit cards is to transfer the balance from these cards onto a low interest life of balance transfer card or a 0 percent interest balance transfer card, which could enable them to save money on interest by enjoying a length interest free period within which to repay the transferred balance.
Heated competition with balance transfer cards
It has been claimed that the credit card sector is becoming increasingly competitive when it comes to balance transfer cards, with a number of different providers now competing against one another to offer the longest interest free period possible on balance transfers. According to reports one provider has now increased the interest free period to a whopping twenty months.
Figures were released recently with regards to the changes in interest free periods on balance transfer cards. According to the data there has been a significant increase in interest free periods over the past year. The average interest free period in March of last year was 15.2 months according to the reports. However, this has now increased significantly to 17.8 months, which is said to be the longest on record.
Offers such as these were scaled back over the recession and financial crisis, but based on this data the competition seems to be returning to the market as providers pit their offers against one another in a bid to outdo their rivals. However, whilst the deals may look attractive to many customers, industry officials are warning consumers to look out for the small print and keep their eyes peeled for additional fees and charges that may apply when taking one of these credit card deals.
One official said: “This competition is welcome news for those consumers who are in a position to take advantage of this price war and consolidate any existing credit card balances on to cheaper deals. However, consumers need to be aware that most lenders are giving these deals to customers who have excellent or good credit histories. If you fall outside of this category then you may find your options are more limited. Before applying for a credit card, consumers need to check their credit profile and make sure there is no adverse information that would jeopardise their chances of being accepted.”
Last minute gift shopping dying out
It has been suggested in a recent report that the last minute shopping that was often seen in the run up to Christmas over the years could be dying out. Many people may remember the days of struggling to find the time and money to do the Christmas shopping and buy gifts. This often ended up with people running around at the last minute desperately scrambling around for last minute gifts, which they then had to get home, wrap, and deliver.
However, officials believe that this is something that is happening less and less as a result of people being more organised thanks to modern day conveniences such as credit cards and the Internet. More and more people are said to be getting online with their credit cards so that they can purchase their gifts early, which is in stark contrast to the last minute rush that many have been used to.
Using a credit card and shopping for gifts online offers many benefits, enabling the shopper to enjoy increased convenience, flexibility, and ease, and ensuring that they do not have to leave things until the last minute. However, at the same time there is also the danger of people getting carried away with their spending whilst online with a card, which can lead to spiralling debt levels.
One industry expert said that there were often problems relating to gifts being delivered at busy times of the year, such as at Christmas, which is why more and more people were buying their presents early.
She said: “The problems of dispatching Christmas goods through the heavy December snows last Christmas mean this year, people are likely to get even more organised and get their orders in online early. Looks like we’re going to have to learn to love those early Christmas adverts.”
What to look for in a new credit card
Following the recent announcement about the High Street banking giant Barclays buying more than one million credit card accounts from the internet banking giant Egg there are likely to be many people that are considering paying off their balances and closing their accounts rather than face changes to their terms and conditions, rewards schemes, and interest rates. For many of those that decide to close their accounts there will be a need to seek out a new credit card but it is important to know what to look for in a new card.
If you are one of the people seeking out a new credit card then you should make sure that you conduct thorough research to make sure that you get the right card for your needs. With the wide range of credit cards on the market these days those with a good credit history and score have plenty of choice, which makes it all the more important to research the market thoroughly in order to find the most appropriate credit card for your needs.
First of all you should work out how you plan you use and repay the credit card as this will play a big part in which card you go for. As an example, if you plan to use your card regularly and repay the balance in full every month then you could benefit from having a rewards based credit card because the interest rates on the card will not affect you anyway. You should then look at the different rewards based cards that are on the market, decide on the type of reward that you prefer, and see which of the cards offers the best deal in terms of the reward.
On the other hand if you are going to be repaying the balance on your credit card on a gradual basis then don’t focus on rewards. Instead look for the best rate of interest available, or better still opt for an interest free purchase credit card. This way you can reduce the amount of interest that you pay on your borrowing and could even pay no interest if you repay the debt within the specified interest free period.
If you are going to close your Egg credit card account you may want to transfer the balance onto another credit card. Again, you can get different deals on balance transfer cards that can save you a lot of money in interest so these are well worth looking out for.