Many may use credit cards to fund home improvements
People these days use their credit cards to fund a wide range of purchases and projects. At this time of the year many are also looking to make improvements to their homes either to simply spruce up their properties or to get them ready to put them on the market to sell.
According to one recent report many people that are looking to make improvements to their homes may decide to do so with the help of their credit card, using their cards to fund the cost of making improvements and repairs, which can be quite costly. For those that are planning to use a credit card to fund the cost of these improvements it is important to choose the right card, which is what industry experts are urging consumers to do.
This is traditionally the time of year when people start to carry out their various repairs and improvements on their homes, so many will already be looking for a suitable credit card to pay for the work so that they don’t have to find the money all in one go. Experts have suggested that one of the most suitable cards for those planning to use their plastic in this way could be an interest free purchase credit card, which will then enable the user to spread the repayments on the balance over a longer period of time. One expert said that it was important for people to do their research thoroughly before signing for a card to ensure that they have a product that offers them the best value for money.
He said: “It is vital consumers opt for a product to suit their needs. Interest-free products work well for those borrowing smaller amounts, and are confident they can pay back the balance with the promotional period.”
Credit card fees – how to avoid them
For most people repaying credit card debt is a task in itself, but many people also end up having credit card fees and interest added, which can bump up the cost considerably. This is clearly something that most people want to avoid in the current climate, and there are a number of simple steps that could help you to reduce or avoid fees and charges that come with many credit cards.
When it comes to using and repaying a credit card you need to be very mindful about how the charges and fees work, so it is vital that you read your terms and conditions carefully when you take out a card. You also need to make sure that you take out the right card in order to get the best value for money on your credit card borrowing. Some of the ways in which you can avoid or reduce fees and charges include:
Avoid missed payments: If you miss a repayment for your credit card or make a late payment you will be charged, and these fees can quickly add up leading to increased debt mounting on your card. The easiest way to ensure that you repay on time every month without missing any payments is to set up a standing order or direct debit so that the money is taken each month and always by the due date so that you can avoid late and missed payment fees.
Always make at least the minimum repayment: If you fail to meet the minimum repayment each month you will be charged. You therefore need to ensure that you pay at least the minimum amount requested. In actual fact you should try and pay over and above this amount as otherwise your repayments will be swallowed up in interest and you will be paying the debt for a very long time.
Go for an interest free card: In order to avoid interest charges you can look at opting for an interest free credit card, where you have a far longer period of interest free credit. This way you will be able to repay the balance over a longer period without being hit with interest charges, which can save you a fortune in interest charges. If you already have an existing balance you can opt for an interest free balance transfer card, which will help you to avoid interest charges.
PPI decision comes as a blow to lenders
This week the High Court has ruled against the banking industry with regards to Payment Protection Insurance, or PPI, compensation payments. The banks had claimed that they could not pay out this compensation because it would cost them billions of pounds but the High Court ruled that the banks would have to ensure that those affected were compensated adequately.
PPI has been at the centre of controversy for several years after claims that it had been widely mis-sold in many different ways. Many said that they were sold the cover under pressure or made to feel that they had to take out PPI in order to get the finance that they wanted. Some didn’t even realise that PPI had been added to the finance and that they were being charged for it. Others were sold PPI when they were never, in fact, eligible to make a claim on it.
The banking industry has been dealt a real blow by the decision, as it means that it will now have to contact millions of customers and ensure that they are reimbursed and compensated for their losses as a result of mis-selling the cover. The Financial Ombudsman Service has already dealt with many of the complaints that had already been sent in, and in most cases ruled in favour of the consumers rather than the lenders.
After the ruling of the High Court was announced an official from the British Bankers’ Association stated: ‘We are disappointed with today’s judgment and now need to consider the details of it very carefully as well as next steps, including whether it would be appropriate to apply for permission to appeal. Any complaints that are directly affected by the judicial review and therefore cannot be decided will continue to be placed on hold until the next steps have been decided.’
Many consumers want rewards based credit cards
Many people these days are keen to apply for a credit card to help them through some of the tougher financial times. There is a wide range of providers to choose from and a variety of credit cards with different benefits to suit different needs and circumstances. It is important for consumers to choose the right credit card for their needs and according to reports many people believe that the right credit card is one that offers a little something back for using the card.
A survey was recently carried out by Sainsbury’s Credit Cards, and revealed that over the next twelve months over eight million people are planning to take out a credit card. The results of the survey also showed that around 28 percent of those that would be applying for credit cards were looking for rewards based credit cards that would allow them to earn something back for using the card, which will come as no surprise in the current climate.
In addition to more than a quarter of respondents in the survey admitting to looking for loyalty based credit cards around one in ten said that their reason for looking for a new card was because their own card did not offer any rewards for spending on the card. Another 8 percent said that their credit card providers had either reduced the rewards that they used to receive on their cards or had stopped them altogether.
Stuart McKeggie, head of Sainsbury’s Credit Cards, said: “Good use of loyalty schemes and card features can help people get a lot more value from their card. People are looking to get more from their card nowadays, whether that is through rewards on their shopping or through extra benefits.”
Consider the true cost of your holiday when booking by credit or debit card
Despite the difficult financial climate seen over the past couple of years there are still many individual and families that are determined to get their annual holiday abroad, even if they have to scrimp and save for the rest of the year. The big difference these days is that consumers are constantly on the lookout for a real bargain when it comes to flight, hotels, and package holidays, and getting a low price has become increasingly important in order to enable people to take the holiday that they have been looking forward to all year.
Many people spend literally days trawling the internet to find bargains, and there are still many great deals available. However, for those that are booking by debit and credit card the bargains may not be as great as they appear. There are some people that will automatically choose one holiday provider or airline over another based purely on the headline price. However, what they fail to realise is that with the cheaper one there are often many additional costs to add on, including hefty debit or credit card administration fees and surcharges, whereas with the slightly more expensive deal there may not have been any added costs, although this is not always the case.
It is therefore important for those looking to book a flight, hotel, or package holiday to ensure that they check out what the headline price includes and what other additional costs and charges will be incurred during the booking process. For example, if you book a flight with Ryanair you will find that the headline price is very cheap. However, when you actually start to book your seat you will find all sorts of fees and charges being added such as a fee each way for online check in (which is now mandatory anyway), £20 each way per item of hold luggage, £4 each way if you want priority booking to get on first and choose your seat, and a whopping administration charge each way for using your debit or credit card. For a flight for four adults costing just £287.92 in total this adds on a further £200, taking the price of £487.92.
Before making any commitment it is advisable to check the total price including all of these fees and then compare against other providers and websites that are offering the same flights or holidays at a slightly higher price, as you may find that you do not have to pay the additional charges with the higher priced package or flight.