Credit where credit’s due

There’s still a lot of confusion out there about the way we use credit cards, how we are charged for using them, and what impact the way we use them is likely to have on our credit histories.

Millions of us use credit cards every single day, a high percentage of these millions have more than one card, and a higher percentage still don’t pay off the balance evert month, which means that they will have interest added to their outstanding balances, often at rates far above the rates that we are paid by banks and building societies when we give them our money to look after for us.

The rate of interest we pay on money that we borrow is really important, especially if we don’t intend clearing our balance every month, but it’s not the only thing that we should be looking at.
How much time do you get to pay your bill before interest is added is important, as are any fees that might be aded to the card, either for missed payments or as an annual charge.

And if you do intend paying off your balance every month then the rate of interest is not important for you at all, and instead you need to be looking at what else you’re getting from the card, apart from important consumer protection when you buy goods using your card. Do you get air miles or discounts at certain retailers or invitations to advance openings for new products.

It’s also important to understand how your credit rating may be affected by the way you use your card and I read lots of stuff about whether it’s better to have one card or more than one and whether it can make a difference if you use more than 50% of your credit limit or whether it is better for you if you make more than the minimum payment every month.

Here’s the most important thing to remember when it comes to your credit history. It WILL be affected if you don’t pay your bill on time, so make sure you do that.

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