Helping banks in crisis, lower tax reciepts and exceeding limits on credit cards has left The UK’s economy spiralling uncontrollably. With all of this doom and gloom you’d hope that at least a tad of good news is coming our way alas, this appears impossible. A report in The Telegraph has reported that the average household in Britain will need to generate an additional ?1,800 per year by 2015 to be able to pay back the interest accrued on their credit cards.
The typical household cut it’s borrowing in 2010 by approximately ?500 but many of us still need to pay back roughly ?8,000 on credit cards and loans. An increase to two or three percent in credit card interest over the next few years indicates that the mounting debt as a result of overspending on credit is not likely to disappear any time soon.
Credit cards have for years been seen as an alternate option to cash but are they now a necessity or a key factor in Britain’s soaring debt? Keep reading to discover the good and bad points of opting to use credit cards:
Merits of credit card use
. A credit card can definitely boost your capacity to obtain goods and services. If you don’t have the cash at hand you have the opportunity of buying now and paying back at a later stage.
. A credit card is a more convenient solution for frequent travellers. Wherever you might be in the world, credit cards are widely recognised; this enables globe-trotters to pay for expenditures and worry about the rest at home
. Credit cards can allow you to buy stuff online. Owning your own visa or mastercard would permit you to benefit from sitting lazily in the safety of your own house browsing on the world-wide-web for your acquisitions. Having said this, many websites will also accept other payment cards such as Visa Delta, Switch, Maestro and Amex.
. Sensible credit card use can easily enable you to develop good credit. If you always pay your credit card bill when they’re due, your credit rating will improve which will make it quicker and easier for you to make more substantial purchases like a property, when you need to.
. Owning a credit card such as a Visa, Mastercard or American Express provides you with the ease and comfort of shopping with a little piece of plastic as an alternative to carrying around lots of money.
Cons of credit card use
. Credit cards, with the buying freedom they offer you, can often lead you to splurge much more than what your regular resources would allow. This can come with devastating consequences and you could possibly wind up spending money on your credit card payments for the rest of your life should you not find a way to suppress your splurging.
. Credit cards are subject to security problems, particularly when it comes to online sales. Anyone who intercepts the details from your credit card can easily start using your details for their own purposes.
. Credit cards as outlined earlier, have elevated interest levels and various other applicable fees. This means when you’re spending, you are really paying out even more than the (blank) price tag so be wary of interest rates and smallprint.
. Having credit cards can also encourage overspending since the simplicity of use makes buying so straightforward.
. The moment credit card repayment schedules get out of hand, can be very tough to gain back control. If you fail to pay your balance by the due date you could find yourself shelling out in substantial fees.
Credit cards are one of those things that could make your life simpler, or turn it into a mess. It’s best to contemplate all of the good and bad points before buying things on credit. Ensure that you pick wisely and that you have the money to come up with the monthly payments as it can before long get out of hand.
This report has been created and presented by PaydayPlus.
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