Credit Cards, Loans, & Mortgages

By Sylvia White

In this age of easy loans and credit cards that are given in abundance to one and all, it is so easy to spend, spend, and spend, without worrying about the final outcome.

If you own a credit card it is much easier to enter a shop and buy what ever takes your fancy without giving a thought to the amount of money you are spending.

If you had cash in your pocket you would think twice about spending on fripperies but a credit card is different, it is so easy to use especially as the cash stays in your pocket.

Well it stays in your pocket for a while, but as the credit card payments go up and up and the interest payments pile on your cash starts flying out of your pocket every month.

The problem is instead of bringing the balance down each month you continue spending up to the limit each month.

Your next step is to apply for another credit card, it’s easy isn’t it?

You can now continue to spend and repay your other credit card repayments with the new one.

This is great and all you have to do is keep applying for new credit cards or a loan to pay them all off so you can start all over again.

The day of reckoning will come and when it does you won’t know which way to turn.  It could even mean the loss of your home if you have dug yourself in too deep.

There are ways and means of course to help you out, debt councillors will take over the repayment of your debts for a monthly repayment that can take years to pay off.

Your repayments will be lower but when you add on the extra charges that you pay to the debt councillors for their services you will be paying thousands of pounds extra over the years.

Are those shopping sprees worth it?

INCREASED CREDIT LIMIT

Providers increase credit limits to encourage you to spend. People who keep a card for emergencies might spend a little more of a larger limit. Or consumers may splash out on a large purchase they couldn't previously afford. Banks believe that those with several cards tend to use the one with the biggest limit.

BALANCE TRANSFER OFFERS

Banks don't let you transfer your balance to a zero per cent rate out of kindness. They are hoping you will stick with them after the zero period runs out.

 INSTANT CREDIT

This happens with store cards. They offer instant credit to spend in store that day if you sign up for their card. This is very tempting as it allows shoppers to buy more without worrying about how to pay. But store cards charge huge rates of interest.