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TITLE AND SUBJECT OF ARTICLE
Store Cards, Credit
Cards And Loans – How To Borrow Money Effectively.
You don’t have to have the lifestyle
demands of Paris Hilton to need extra money these days.
According to Credit Action, the total UK personal debt
was 1,122 billion, a growth of about 10.5% over the
previous year and in the UK and each adult in the UK has
an average of 4.1 credit cards in their wallet.
In their most recent report, Credit Action also recorded
2.3 million personal loan agreements in the second
quarter of 2005. Interesting, the national money
education chari...
Personal finance, personal
loans, credit cards, store card, loans UK, consumer
borrowing
You don’t have to have the lifestyle
demands of Paris Hilton to need extra money these days.
According to Credit Action, the total UK personal debt
was 1,122 billion, a growth of about 10.5% over the
previous year and in the UK and each adult in the UK has
an average of 4.1 credit cards in their wallet.
In their most recent report, Credit Action also recorded
2.3 million personal loan agreements in the second
quarter of 2005. Interesting, the national money
education charity discovered a gap between the interest
rates advertised for loans and the actual interest rates
paid by the borrowers.
So, with such volumes of
debt, what is the best way forward in managing your
money?
1) Prioritise your spending
Decide
what you need to buy and when you need it. If it’s not a
necessity, put it to the bottom of the list. With
Christmas approaching, it’s important that you have an
awareness of your budget. Make a list of things you need
to buy – including Christmas presents. Once you have a
list, shop around for the cheapest deal – including some
internet research. Thirty minutes of surfing the
internet could result in significant savings, which will
either reduce outstanding debt or contribute to savings.
2) Prioritise your borrowing
If you borrow
money, when do you think you’d be able to pay it back?
For example, for smaller amounts of money that could be
paid within a shorter period of time – a credit card
might be the most flexible way of borrowing money.
Alternatively, if you need to borrow a larger sum of
money and wish to make the repayments over a longer
period of time – then a personal loan could be more
effective. Do some homework online, sites such as
moneynet and moneyfacts provide online financial product
guides and price comparison information.
3)
Prioritise your requirements
In addition to
thinking about how much money you need to borrow and how
you want to repay it, you may wish to look at other ways
in which your financial products could work for you.
Examples include cash-back, reward points, charity
donations etc.
4) Never, ever, take out a store
card
Whatever the discount the store offers you
on the day, remember, it won’t be as a gesture of
goodwill. Nearly all store cards carry a vastly inflated
rate of interest and they rely on you not being able to
pay off the balance in full straight away. There is a
strong chance that what you ultimately end up paying –
is far greater than the discount on the actual day.
5) Do you really need it?
As Christmas
approaches, it’s easy to spend a little extra on
clothes, food and drink and presents. However, if you
make a list of what you need and stick to it, you’re
likely to save yourself more money this way than if you
went out impulse shopping.
Resources:
http://www.moneynet.co.uk/credit-card/index.shtml
http://www.moneynet.co.uk/personal-loan-guide/index.shtml
Student Credit Card
- How To Choose The Right One
This article will help you understand how
to choose a student credit card.
student credit
cards, credit cards for college students, student credit
card
Getting a student credit card is not hard to
do. The problem comes in how it is used. Your student
should not be carrying large sums of cash each month to
get through the month. It could easily be lost or
stolen. I had a friend that was considered a genius.
While we were at school he couldn't remember from one
day to the next what he had done the previous day, or
where he put anything, including his money. Another
friend constantly ran out of money by the middle of the
month and was either borrowing form other students or on
the phone crying to his father about needing more. Not
to say I was a saint, but that is another story.
A student credit card may be the first line of credit
your child has. It will depend on the child if they
understand the responsibilities of having one. Student
credit cards can come with a monthly limit or with no
limit at all except for the bank limit. You have a
choice in that matter, because usually the student will
need a co-signer for that card.
In a credit based
family a child may have signature loans by the time they
are twelve. My uncle was one of those people. They used
a well known institution for signature loans and he
would take out six month to one year loans for music
equipment that he was easily able to pay back in half
the time. By the time he was sixteen his credit rating
soared and to this day he has no problems with getting
what he wants when he wants it.
Most of us are
not that lucky however, and some students just are not
driven by desire. A student credit card should not be a
gift and should not be considered a gift by the parents.
The students themselves should be mentally-aware of how
to handle finances. If your child is one of those that
still has a quarter when you give them the second one a
week later, then chances are they can handle a credit
card. If it was lost or spent, you may need to start
worrying.
For the sake of the article we will
assume that, while yet unproven, there is no indication
that your student will use the credit card for junk.
First sit down with the student and decide what the
credit card will be used for. Keep in mind that a cola
and pizza a day adds up to over $4475 plus tips, in
credit over a year! The sum does not take into
consideration other meals and snacks. A single candy bar
at a school could easily add up to $365 dollars in
credit over a year, if they only ate one a day. Try to
remember your eating habits when you were a student.
Dormitory, apartment rent, books and tuition should
be paid by check. If there is a car involved it should
also be paid for by check, unless you and your student
are familiar with online banking and the great benefits
a good system offers.
If you are giving support
to your student you can setup an auto withdrawal from
your bank account each month to payoff the student
credit card payments. The credit card can be great for
just about anything but it, just like everything else,
needs to be in moderation, and I mean moderation within
your budget, not necessarily the students budget.
After you have decided on what the credit card will
be used for go online and start searching. Make sure you
pay attention to the all of the details of the card, and
all of its terms and conditions. Above all, make sure
there is an automatic bill payment feature so the card
is never paid late.
Home Refinancing
For People With Bad Credit - How To Avoid High Fees
Avoiding high fees when home refinancing
with bad credit is as important as finding low rates.
With fees adding up to thousands of dollars, make sure
that you are getting the best deal by comparing lenders.
Also look at other types of credit to securing cash out
financing.
Ask About Closing Costs And Fees
To save yourself money, research lenders before
settling on a refi loan. Request loan quotes that
include information on closing costs and fees. The APR
will include t...
mortgage refinance, bad credit,
home refinancing
Avoiding high fees when home
refinancing with bad credit is as important as finding
low rates. With fees adding up to thousands of dollars,
make sure that you are getting the best deal by
comparing lenders. Also look at other types of credit to
securing cash out financing.
Ask About Closing
Costs And Fees
To save yourself money, research
lenders before settling on a refi loan. Request loan
quotes that include information on closing costs and
fees. The APR will include the interest rate, closing
costs, and any annual fees. But be sure to also ask
about early payment or any other fees.
Be aware
of fees or closing costs that are included as part of
the principle. These are often labeled as “zero down”
loans, but in reality you are paying for those fees
throughout the loan.
With loan quotes, know that
even the fees are negotiable. You can ask for them to be
removed or eliminated. Some fees, such as the early
payment fee, are only removed if you pay an additional
amount at closing.
Select Low Fee Terms
While you are researching financing companies, also take
a look at how they structure their loans. Often the
lowest rates, such as interest only or balloon payment
loans, have the highest fees.
Select terms that
are more favorable for low fees, such as fixed or
adjustable rates. Adjustable rates are usually the
lowest costing loans with some risk of increasing future
rates.
Other Ways To Cash Out Your Equity
If you are simply refinancing to cash out part of your
equity, consider applying for different types of credit
to save on fees. Second mortgages and lines of credit
have much lower closing costs than refinancing your
total mortgage. They can also be held for a shorter
period, which also saves you money.
While low
fees may be your goal, be open to better financing
options. By comparing the APR, you may find that average
fees can yield better rates that will save you money.
The longer you keep your loan, the more important low
rates will be.