Yesterday I read some worried news that credit card spending is still increasing despite the past 12 months warning we've had the form of the credit crunch.
UK consumers are using credit cards as means of day to day living, so using their credit cards every month just to 'get by' with the increased cost of living. Unfortunately the Bank of England has announced that they expect inflation to continue rising in the UK and expect it to hit 5.5 per cent before the end of 2008. This level of inflation has not been experienced in the UK for well over 20 years.
Unfortunately people will continue to struggle to make their finances stretch and it looks as though people are already turning to credit cards as a means of survival.
If you already have credit card debt the best immediate action you can take is to transfer the balance onto a 0 per cent balance transfer deal. There are plenty of cards on offer and one thing to consider is the balance transfer fee the credit card provider will charge you. This is a set charge, usually a percentage of the total amount you wish to transfer. For example, if you transfer £ 5,000 to another credit card the provider usually charges from 2.98 per cent to 3.5 per cent, so you will be charged from £ 149 to £ 175. The balance transfer fees vary from provider to provider so make sure you find out exactly how much you will be charged.
The benefit of transferring a balance to one of these credit cards is that the provider offers you 0 per cent interest for a specified time period. The longest 0 per cent deal in the UK today is 15 months. So you have well over a year of no interest, of course you still have to pay the monthly minimum amount, but interest on a balance of around £ 5,000 can be as much as £ 20 or more.
If you are really struggling to clear your credit card debt and, as many people do, you're using one credit card to pay off another, then now is the time to seek professional debt management advice. If you are unsure where to start looking for good, free debt advice then contact your local citizens advice bureaux; details of which can be found online or in your Yellow Pages. Take action today.