Credit Cards Guide

Credit cards were invented by Joseph Williams back in 1958, while working at the Bank of America in San Francisco. His innovation was to allow users to pay off balances over time unlike American Express and Diners Club cards which were already in use at the time.

There is no doubt credit cards have provided their owners with a convenient and easy way to pay for goods, but at the same time irresponsible use by many card holders can often lead to large debts being accrued. Since the interest rates on credit cards are almost always higher than loans, overdrafts and mortgages, credit card debt can become expensive to maintain.

There is one new feature to credit cards however, which makes it possible to use them as a means of handling rather large amounts of debt effectively. This is the fact that many credit card issuers are so interested in winning and keeping your business that they will offer you 0% on balance transfers for the first 6 months and sometimes longer. It is worth taking advantage of these offers as if you have existing debt it can give you a chance to pay off some of the capital rather than just covering the interest with your monthly payments.

Credit cards in the UK have certainly moved to prominence with many Brits using them to sustain chronic borrowing. However, it is important to remember that the 0% offers do dry up eventually, possibly leaving you with a large debt that you can't manage. For this reason careful planning is required if you are to use credit cards effectively.

If you have run up a credit card debt that you are unable to manage you may need to consider consolidating it. If there are no more 0% offers available then your best option could be a loan or even a re-mortgage depending on the size of the debt. Where possible avoid spending on cards if you cannot afford to make the repayments later. If you calculate your expenditure wisely you can make credit cards work for you but if you are not sensible and don't plan carefully then credit cards can quickly turn into a nightmare.

The best way to use a credit card or store card is to be realistic and don’t over commit; Be careful and remember it is debt, not real money that you are spending when you use them.