Credit Cards Can Be Useful With Care

During the recession debt has come to be a dirty word for many people. We have been repeatedly told by the media that reckless borrowing, unchecked spending and the thoughtless dishing out of credit cards and loans were all contributors to the demise of the economy.

It is time, consumers were told, to get frugal and spend within their means - a message which does not tally well with having a credit card.

However, one expert has stuck their head above the parapet and advised consumers that loans and credit cards can be essential tools in managing debt.

A banking specialist at a leading finance firm says that credit cards can provide consumers with an immediate source of cash in times of need, i.e. if a homeowner's boiler breaks and needs repairing; a credit card could give them the means to have it fixed straight away.

He continued: "Credit cards, overdrafts, personal loans and mortgages can be incredibly useful both to tide us over at times of need, and also to facilitate purchases of necessary items.

"For some reason, many people think that debt has become a dirty word over the course of the last year or so, but, treated responsibly; it remains a natural ally and a useful tool in today's society."

However, those who do choose to use credit cards in times of need have been advised to ensure that they make their repayments on time - especially during a postal strike.

A financial journalist has written that credit card users could be hit with millions of pounds in late payment charges, if their statements are delayed by postal strikes.

Firms charge around £12 a month for missing a payment date and such an action can also have a negative effect on an individual's credit history, lessening their chances of being given a credit card in the future.

To protect yourself, set up a direct debit to pay your credit card bill, which is a good idea even when the post is running smoothly. You can pay the full amount off each month or just the minimum, if you can’t afford the whole lot.

If you would like to know more about credit cards why not ask AnswerBank Business and Finance.