Even though politics isn’t one of my great priorities in life, it was hard not to be shaken by the recent Brexit vote. To what extent it will end up affecting the majority of individuals like us remains to be seen, but all the talk of recessions and downturns does make you take stock. All we can do at home is ensure that our household finances are as stable and healthy as possible.
The big one which seems to be a problem is debt, and Brits are quietly slipping further and further into a dangerous spiral, and living beyond their means. It’s interesting to note that there is such a stigma surrounding taking out a loan, yet when it comes to credit cards, many are willing to swipe or tap away at the plastic without much consideration.
The irony of this is that credit cards, although convenient, are typically very expensive if you simply make minimum repayments each month. APRs are usually 20 per cent or more, which is a much higher interest rate than you’ll generally get on a personal loan if your credit rating is sound.
Using your credit card to your advantage
Of course, credit cards can be a force for good too. First of all, using them (and paying them off) is actually vital to building a good credit score. But the more appealing perk is undoubtedly the rewards many providers are throwing at us in order to attract business. Some are offering great cashback deals every time you spend, while many others are offering things like vouchers, free travel insurance and significant discounts on a variety of purchases.
There is no reason not to make the most of such benefits, and popping your ordinary expenditure on your credit card as opposed to debit card won’t cause any harm – provided you ensure that you clear the balance each month. Because if not, the interest you’ll need to pay will likely far outweigh any rewards you’ve enjoyed. After all, these credit card companies are out to make a profit from us.