Credit Card Debt

Credit card debt is extremely common amongst consumers. Using a credit card requires being responsible with the money you have access to. The penalties of credit card debt are often very high, with charges deliberately set at high percentage rates by credit card lenders. Credit card debts are volatile, because they can easily get out of control. However, if you are in credit card debt and are worried about meeting your credit card repayments, there are ways of avoiding the credit card debt cycle.

Steering clear of credit card debts

Many consumers in the UK use credit cards to borrow money to spread their repayments over a longer period of time. However, particularly if money runs short, some people fall into the trap of using their credit card to pay for everyday costs. This is a dangerous financial practice, and can quickly lead to credit card debt piling up. For this reason, you should only borrow on credit cards what you plan to repay in full. Credit card interest rates will be charged depending on the APR, the annual percentage rate. Furthermore, if you miss your monthly repayment, you may also be charged for not paying off your balance.

Watch our for balance transfer as a way of avoiding credit card debt

Balance transfer can be extremely useful. Credit card companies offer cards with zero per cent interest rates or balance transfer fees. Borrowers in credit card debt may then switch their balance to the new card with the aim of avoiding debt. However, once the interest free period expires the borrowers will be left being charged interest as normal. Consumers need to take care and read the small print and avoid using their card to trigger further interest repayments. Credit card lenders may also charge a balance transfer fee linked to the balance being moved.

Store card debt

Store card debt can be even more serious than credit card debt, with huge (sometimes ridiculous) interest rates charged by store card companies. Store cards usually work in a similar way to credit cards, but may well be limited only to the store in question. Often, this type of card includes an incentive to attract borrowers. Unless the borrower intends to pay off the balance in full, store cards can be a road to debt disaster.