Monday, May 10, 2010
Category:
Consolidation
According to an analysis conducted by moneysupermarket.com, missing a credit card repayment or making a late repayment could lead to hundreds of pounds worth of additional interest charges. Furthermore, cardholders could be left with a ‘blip’ on their credit profile.
The comparison site has revealed that consumers could move an existing, expensive credit card debt to a 0 percent balance transfer deal to avoid paying interest on the money they borrow. However, consumers are reminded that missing a repayment or making a late repayment could cause the interest free benefit to be replaced with a ‘hefty bill’. Therefore, moneysupermarket.com advises setting up a direct debit to avoid this.
Credit card expert at moneysupermarket.com, Peter Harrison, commented: "An interest free balance transfer can be a great option for consumers looking for some financial flexibility, but many customers are unaware of the severe impact a single missed payment can result in. For those who do go down the balance transfer route, it's crucial that they make regular payments; otherwise they will not only receive a late payment charge, but could also lose their zero per cent deal. Setting up a direct debit for the minimum repayment as soon as you take out the product is crucial, especially if you're the type of person who may inadvertently miss a payment or pay it late. However, when you receive your first statement, check with your provider to make sure the direct debit has been set up correctly, don't assume it will be set up in time. It is not advisable to repay just the minimum repayment each month, so look to make additional payments on top of the direct debit to bring the balance down and repay the debt before the 0 per cent deal comes to an end.
"It's also worth noting that missing payments could have a negative effect on a customer's credit rating, making it harder to get accepted for products in the future. For anyone looking to make a credit application after a missed payment, it's worth waiting a couple of months to show that you have got your credit file back on track and that it was just a blip. Lenders are scrutinizing credit applications in greater detail than they did prior to the credit crunch, so even the most minor mistake can cause problems.
"If you do miss, or are late making a payment on your card, you should speak to your card provider immediately and ask for your promotional rates to be reinstated. There is no guarantee this will be done however, it is at the discretion of the provider, and they will treat each case on its own merit."
……………………………………………………………………………………………….......
Homeowners who would like to be free of credit card repayments could consider tying them all up with a secured loan. One of many finance options available, a secured loan for debt
consolidation could pave the way to lower monthly outgoings and therefore extra money each month. However, if opting for a secured loan to consolidate debt, it should be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.
