Is it time to start hunting for a good Christmas credit card deal?
Christmas is the last thing that many people are thinking about at the moment, as many are enjoying the warm weather and being able to spend more time with their kids in the summer holidays. Many are still looking forward to heading off on their summer holidays. However, there are some people that will be considering the up and coming Christmas period, which although four months away will most likely be here before we know it.
Over the coming weeks those that are planning to use credit cards to pay for purchases over Christmas may start the hunt for a suitable deal. For many, getting a credit card that offers interest free credit on purchases will be essential in order to avoid paying interest on purchases made, and with some great deals around from credit card providers at the moment many may believe that now is the time to get their card in preparation for Christmas shopping.
There are also many people who will be considering using a credit card to make purchases for Christmas but will be unsure as to whether their application for a credit card will be approved. For these people, an early application can make a huge difference, as it is turned down they will then have plenty of time to think of an alternative means of funding their Christmas spending rather than suddenly finding themselves with no financial lifeline and no time to think of an alternative.
One industry expert said: “We all know how time can fly and Christmas may seem a long way off now but it’ll be here before we know it. For those planning to use a credit card it is always worth keeping your eyes peeled as otherwise you could miss out on a great deal. It also means that if, for any reason, you are turned down you still have plenty of time to think of alternative means of funding your Christmas purchases.”
Many determined to clear credit card debt in UK
A recent report has revealed that many people in the UK are so desperate to try and clear their credit card debts that they are raiding their savings and cutting back on their spending as much as possible in order to try and get rid of this financial burden. A recent study was carried out by Dutch-owned bank ING Direct, which showed that average debts on credit cards and loans had fallen to its lowest level in 18 months and around five million people had managed to get out of credit card debt in the past twelve months.
Many consumers have accrued costly credit card debt over the past couple of years, as financial problems and overstretched finances have forced them to borrow money to deal with even basic and essential purchases. Many are now trying to clear this debt as much as possible and are thought to have dipped into their savings by an average 5 percent in order to try and pay off their credit card debts.
Many consumers are getting little to nothing on their savings in terms of interest whilst they are paying a fortune in interest on festering credit card debts. With this in mind, many have decided that they are financially better off in the long run by getting rid of their costly credit card debts and the high levels of interest that come with them and taking a hit on their savings or even on their spending.
One credit card holder said: “I’ve had to rely on cutting back wherever possible in order to try and clear my credit card debt and overdraft because I can’t handle the interest payments anymore and don’t have good enough credit to get a 0 percent balance transfer card.”
Many Brits bridge the gap with credit cards
It has been revealed in a recent report that a rising number of Brits are bridging the gap between when they run out of money and when they next get paid by using their credit cards to fund their spending. A number of reports have recently highlighted the fact that more and more Brits are finding it impossible to make their budgets stretch far enough as a result of living costs, bills, food prices, and petrol prices soaring whilst wages have been frozen or have been cut in some cases.
It seems that the way in which millions of Brits have been coping with this problem is by turning to their credit cards once they run out of cash, which means that they are at risk of accruing spiralling credit card debts on top of rising living costs. For many Brits it is around twenty one days after they get paid that they run out of money, at which point they have to start using their credit cards to fund their spending.
However, the research also showed that in some cases people were running out of money even sooner than this. Around one tenth of those that had become reliant on credit cards to get them through the month financially said that they had to turn to their cards around fifteen days after getting paid.
One industry official said: “With most of the population feeling the pinch at the moment, it’s no surprise to see so many people reliant on credit so early in the month. However, unless you plan this properly and know you’re able to pay off your balance, this can be a dangerous trap to fall into. If you’re the type of person who doesn’t pay off their card every month, you need to look at the steps you can take to reduce monthly expenditure before turning to credit products. Budgeting is crucial at the moment and people will be amazed at how much cash they can free up each month by simply sitting down and going through their finances.”
Consumers failing to check interest rates on financial products
There is little doubt that in this current financial and economic climate there are huge numbers of people that are keen to try and save money and cut back on their outgoings. However, many people are failing to take some of the most basic steps that could allow them to do this with relative ease, such as checking how much interest they are paying or being paid on various financial products.
A recent survey has shown that huge numbers of people are failing to check on their financial product interest rates, which means that either by paying more interest or not being paid enough interest they could be losing out on money each year. The financial products that consumers should check interest rates on but often fail to do so include credit cards, current accounts, and savings accounts.
The recent data showed that around 62 percent of those with current accounts had either never checked the interest that they received or could not recall doing so. Shockingly around 24 percent of credit card holders had never checked the amount of interest that they were being charged on their borrowing whilst 13 percent had never checked how much interest they were receiving on their savings. The upshot is that many people are either paying too much interest or are not earning as much interest as they could.
One industry expert stated: “It’s important to keep looking for better deals as the market changes. The rate you received when you first got the card or account can change over time, and you won’t always be informed of the changes. In times when every penny helps, reducing the interest you pay on your credit card, and increasing the amount your savings earn can make a big difference to household budget. So if you haven’t checked your rates, do so now and look around for better deals – you might be surprised by the difference.”
Fall in credit card use in 2010
Many people have been using credit cards on a regular basis for many years, as these cards are able to offer huge amounts of convenience, ease, and flexibility. Many people use these cards on a daily basis to save them carrying and cash and so that they can spread repayments on their purchases. However, one problem that has come from the popularity of credit cards is the number of people that have found themselves in huge levels of credit card debt, which has made life very difficult for them.
With the financial climate having been more difficult than many people have ever experienced over the past couple of years, many people have come to a point where they have had to take action to try and reduce their debt levels and avoid getting into any more debt. Despite the popularity of credit cards, research has shown that a rising number of people have been trying to avoid further debt by cutting back on credit card use.
Research was carried out by the British Retail Consortium showing that credit card use fell by nearly 13 percent last year, as consumers turned to cash and debit cards in order to try and avoid getting into further debt, and debit card use over the same period increased by 15.8 percent. The BRC said that more and more people were focussing on reducing their debt and avoiding increased debt by cutting back on credit card use. The consortium said that cardholders wanted to stop spending money that they hadn’t really got.
An official from the BRC said: “Hard-pressed customers are switching to cash and debit cards for the reassurance that they can’t spend what they haven’t got. At the same time, use of credit cards has dropped sharply. Cash remains king – used for more than half of all retail payments. “