The dos and don’ts of using a credit card
Christmas costs can soon add up – meaning it’s a time of year when some people reach for their credit cards, or make new applications for credit, to make their spending more manageable.
Here are some dos and don’ts from Moneysupermarket (moneysupermarket.com) to make the most of credit cards ....
■ DO use plastic to improve your credit rating. Using a credit card responsibly can help show you’re a responsible borrower.
■ DO pay off what you owe in full each month.
■ DO look out for zero interest deals. Some cards will offer 0% on purchases for a specific period, or 0% on outstanding balances transferred from elsewhere.
■ DO set up a direct debit to pay off your card.
■ DO use cards to spread the cost of a big purchase. If you’ve got a big purchase coming up, a 0% purchase credit card deal can be a good way to spread the cost. Just make sure you’ve paid it off before the interest-free period ends.
■ DO look out for cashback and rewards. Depending on what type of card you choose, your everyday spending could help fund your next holiday or your Christmas grocery shop.
■ DON’T forget the small print. Go through the terms of any credit card you’re considering.
■ DON’T spend without a repayment plan. A plan will make it easier to keep track of the amount you need to pay to be debt-free within a time frame.
■ DON’T max out your limit.
■ DON’T make multiple applications quickly. Each time you make a full application for credit, a “hard search” will be reported on your credit score. If you get turned down, it can have a negative impact.
■ DON’T forget to monitor your credit score regularly.
■ DON’T forget about your consumer rights. Credit cards can give people added rights if something goes wrong with a purchase.