Credit cards can boost your credit rating
Once you’ve got the feel of shiny plastic in your hand, it can be hard to resist the temptation of a shopping spree. That’s exactly how credit card spending gets out of hand.
A credit card should never be used to spend outside your means. If you couldn’t afford it with cash, perhaps you shouldn’t buy it. It sounds simple but so many people are lured into an unfortunate debt cycle because they don’t manage their finances properly.
Poor credit history
If you are struggling to get by because you’ve got a bad credit score weighing you down, it’s probably time you did something about it. If lenders see you as an irresponsible borrower they will charge higher interest rates and in some cases reject you completely.
A ‘bad credit’ credit card can actually improve your credit score and pave the way to greater financial opportunity. If you’re looking for credit cards in the UK then there are numerous options you can investigate online.
Saving money
Many people that don’t have access to standard credit cards often end up using more expensive methods of borrowing, such as their overdraft or store cards. Although it might seem necessary at the time, borrowing in this way can lead to huge interest charges.
It might seem a little strange but a ‘bad credit’ credit card can actually save you money. If your credit score improves as a result of your responsible borrowing, you might find that you’re offered a lower APR on credit agreements for credit cards, loans, mortgages – meaning you pay less interest.
How to use a credit card
As mentioned, it can be hard to avoid seeing pound signs when you first get your credit card, but it’s important that you restrain yourself. Instead of splashing out on things you can’t afford, use your credit card to pay for those things you would be buying anyway; from the groceries to your utility bills.
Once you’ve used the credit card to make a purchase you should pay off the balance in full by the repayment date. Failing that, at least pay the minimum amount due, (this will be shown on your monthly statement) as this proves to your lender that you know how to borrow responsibly and that you are always able to afford your purchases.
If you want to boost your credit rating, then there are plenty of classic credit card options available. Of course, before committing to a financial contract of any kind you need to do research and that requires you to find out more about a classic credit card. It’s important you always read the terms and conditions carefully and only enter into an agreement which you are confident you are able to uphold.
Guest post brought to you in association with Aquacard
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