Related Credit Card Article

"Yes You Can Lower the Cost of Your Credit Cards"

By admin | November 10th, 2009 | Featured

In the past credit card companies have raised customers’ credit limits unbeknownst to them, sent them checks they can use to transfer balances and have charge exorbitant interest rates on balances.

This is about to come to an end with the plans the UK government has in place to crack down on the ruses used by these companies that lead to consumers going farther into debt. The practices of the companies have come under criticism in the past and with the many critics of the policies they use, the government is starting to pay attention to the complaints of consumers.

Cliff D’Arcy of Lovemoney hails the government plan as being an exceptional one, but others, such as David Budworth are reserving judgement until more information is forthcoming. The government has been slow to put their plans in place and have only developed a white paper on the subject as yet. According to Budworth, the new proposals are too little, too late and have been “introduced with all the speed of a tortoise with the swine flu.”

The problem is that while it is a good plan to place controls on the operations of credit card companies, there is very little in the white paper that gives any indication of the concrete action the government intends to take. Banning credit card checks is seen as a positive action because they are sent out by the companies without any request from the consumer.

Then when they are used, the interest rates charged for their use is much higher than the standard rate the company usually charges on unpaid balances. Many consumers do not read the fine print and find out too late that they are actually paying more than they thought. This is about the only concrete action spelled out in the white paper at this point in time.

It will take time for the government to implement the plans for control of credit card companies, but in the meantime there are ways consumers can start lowering the costs on their own. One of the best ways is to change the thinking that a credit card is a method of obtaining unlimited cash for every need. They are not ATM’s where you are using your own money.

Every time you use your credit card for a purchase, you are actually paying more for the purchase than you need to. You should never use the ATM machine to take out cash from your credit card because unlike making a purchase, you start paying interest on this money immediately.

Limit the number of credit cards you use. Try to have one card for paying down your debts and another for your spending. In this way, you only have two monthly bills to pay each month and you can control the costs associated with them. Use a zero percent credit card whenever possible so that you are not wasting your money by paying away part of the payment in interest each month.

If you pay close attention to the monthly statement for your credit card each month you will see that the amount of the minimum payment is not very much higher than the interest charged on the outstanding balance. Too many people make the mistake of paying only the minimum amount, which means that they will take a long time to actually pay off what they owe on the card.

You should always pay more than the minimum each month and if possible pay the minimum requested in addition to the amount of interest. In this way you will not only be lowering the balance, but the amount of interest for the following month will be reduced.

Tags: credit card costs, Credit Cards

Related Articles:

• Annual Fees May Be Coming for Credit Card Holders

  With the government clamp down on the credit card industry in the last months, credit card companies are poised to charge an annual fee for the cards in order to recoup some of the losses that they have incurred. The Internet bank EGG recently released a new credit card that had an annual fee of...

• Government aims to increase charity donations via credit cards

  It has been claimed in a recent report that the UK government is hoping to increase donations that are made to charities across the UK by providing credit card holders with the means to make a donation each time they make a transaction on their credit cards. Officials believe that this is a way in which...

• Ways You Can Lower the Interest You Pay on Your Credit Card Balance

  Credit card companies charge a high rate of interest when you have an outstanding balance on your credit card. This interest is often a small amount less than the minimum payment each month so that you are paying very little on the debt each month. Take a look at these tips designed to help you...

• Annual fees could be introduced by more credit card firms

  There are concerns that a rising number of credit card firms could start introducing annual or monthly fees for their credit card customers in order to make up for lost revenue resulting from government and regulatory crackdowns. One major credit card provider, Egg, has already launched a new card with a £1 a month fee,...

• More Protection For Credit Card Borrowers But With A Catch

  With a consumer white paper released to aiming to protect consumers by curbing reckless borrowing and spending, and a white paper designed to protect Britain from a repeat of the current financial crises with tougher legislation for banks, it seems the Government is finally recognising the need to rein in on sneaky, unfair tactics used...

Other Recent Articles

Use of credit cards declines whilst payday loans increase

It seems that many consumers may have switching from spending on credit card that can sometimes come with high rates...

By Reno | February 10, 2012 | Read More

Useful Tips for Credit Card Holders

Modern technology offers comfort and convenience that is often helpful for people in a fast paced everyday living. With just...

By admin | February 7, 2012 | Read More

Credit card decision by Lloyds could have serious effect on charities

For many years now, a range of leading and well known charities have been able to boost the levels of...

By Reno | January 28, 2012 | Read More

Many have to rely on credit cards to make ends meet

There was a time when people had credit cards to enable them to pay for occasional larger, more expensive items...

By Reno | January 26, 2012 | Read More

Brits increasingly dissatisfied with credit card providers

According to recent reports, Brits are becoming increasingly dissatisfied with their credit card providers, particularly in the case of the...

By Reno | January 20, 2012 | Read More