Playing The Credit Card Game

More and more people, particularly in the United Kingdom are becoming swamped in credit card debt on top of their existing loan debt and mortgages. This might sound like a job for Debt Free Direct but there are certain steps you can also take yourself to assist in money and debt management. Credit cards in general have become notoriously easy to get accepted for and the credit limits that are offered to the general public appear to be getting higher and higher. This is great if you need the high limits for business or a single, high end purchase, but more of than not, people run their cards right up to these high limits for small, often insignificant purchases.

Once the credit card is maxed out, many just stick with paying the minimum monthly payment. If you do this, you’re going to have credit card debt for the rest of your life. Well, not quite, but almost! It is a well known fact that minimum monthly payments will only clear the interest you owe on the balance for that particular month. Only a small portion of the funds you pay will be used to clear the card balance itself. Do not make the mistake in thinking that £50, £100 or £200 you pay each month is going off your grand total, it isn’t.

What many are doing now is playing what is known as the credit card balance transfer game to combat this. What this entails is moving your maxed out balance onto a completely new credit card that has no interest or at least a much lower rate than you’re currently paying. It makes perfect sense if you think about it. If you’re paying money each month off interest on a £10,000 limit maxed out 15% APR card, you’re losing a hell of a lot of money. If you move the balance onto a card with no interest due, you can be paying the same money off each money and actually have it working towards your total amount owed. Or you can just pay the minimum amount.

Of course not everyone has the ability to get a new credit card in order to stop their interest payments. If you’re unable to do so, you might consider seeking some debt management advice from the likes of Debt Free Direct or similar.