Don’t get caught out by credit card ‘deals’

August 16, 2013

The recent cap on benefits introduced by the UK Government in July is rumoured to be affecting around 4,600 households in Scotland. This new strategy will result in a deduction of around £100 per week for at least one quarter of Scottish households, and for those affected by the changes, could leave families with no choice but to borrow funds, possibly from credit cards, to make ends meet.

For disadvantaged families who are already struggling financially, it’s possible that credit cards will be the first route to funding extra financial help. However, it’s important to check the small print before making any drastic changes to your spending habits.

If you’re struggling with the legal jargon included in your credit card agreement, why not speak to a professional adviser who can simplify the information and explain it in a way that makes sense to you? Our knowledgeable team at Scotland Debt Solutions are specially trained to offer advice about a wide range of financial issues, and would be happy to personally discuss your needs whilst offering a safe and suitable solution.

Credit card deals can be enticing, especially when you’re struggling to pay bills. Low interest rates and popular deals offering 0% interest have flooded the marketplace in recent years, and it’s easy to forget that by choosing a credit card, you are entering into a legal contract. Like any legal agreement, breaching the terms and conditions will always incur a penalty, so ensure you have thoroughly read through any documents before committing yourself.

Defaulting on (missing) payments is just one of the many ways a credit card can quickly become expensive, even if the payment is returned due to an error. The penalties on a missed payment can escalate quickly, so make sure you always check your statements thoroughly for any unexpected charges.

Low or 0% interest deals, though tempting, can also be withdrawn following a defaulted payment.  Although you should not expect to default when signing up to a credit card, it’s not uncommon for circumstances to change and occasional missed payments to be missed. Make sure you’re fully aware of the terms and conditions, so you know the resuming penalty, should this happen to you.

It’s important to be aware when the 0% interest rate period expires. Credit cards offering these deals often replace the 0% rate with a much higher rate. Providing your payments are up to date, at this point it might be time to consider switching to a better deal.

When you decide on a credit card, don’t be disheartened if you’re not offered the advertised rate. Only a small proportion of applicants are ever eligible for the advertised deals, so make sure you’ve checked the full details of your offer as it is often much higher than expected.

Credit cards and interest rates are confusing. So if you’ve found yourself struggling with the repayments on your credit card, why not speak to one of the specialist advisers at Scotland Debt Solutions,  who will be happy to advise on your individual financial situation.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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