04 October 2021
Pay your credit card debt off with a MCU loan
How many of you have a credit card or maybe even more than one? Hands up if you have overspent and are a bit worried about making the repayments? I think we have all been there! We see something we really want or need and within minutes we have purchased it on a credit card with little consideration of the repayment implications.
There is no doubt that by having a credit card you can benefit from lots of perks and rewards for using it and responsible usage can help you to build up a strong credit profile.
Also, did you know that credit cards can provide you with an extra layer of protection if ever things go wrong when used for purchasing goods or services? Under section 75 of the Consumer Credit Act you are covered if you use your card to purchase something between the cost of £100 and £30,000. If there is a problem with the item purchased or even if the seller goes into liquidation, you can claim against your card provider to cover you for any loss.
Clearly credit cards are extremely handy to have in your purse or wallet, but it is really important to use them carefully and not get into excessive debt by over spending. If you can pay your bill off in full each month that’s great, but what if you can’t?
When you get your monthly bill you should make at least the minimum payment, and on time. This is really important as your payment history influences your credit score more than any other factor, and late payments will incur financial penalties and affect your score negatively. If you can, you should try to pay off more than the minimum amount your provider requests as it will help to reduce the balance quicker and crucially, it will positively affect your borrowing limits. Only paying the minimum amount each month can lead to expensive interest charges, particularly if you have a high balance.
As a rule of thumb, you should only use your card for essential purchases. By paying off the balance in full, you avoid paying interest, but if you don’t pay the full balance off, the provider will start to charge interest, sometimes at a very high APR.
If you have found yourself with high credit card debt, why not consider applying for a loan with us to pay it off? Please contact us about a debt consolidation loan, as the repayments will be cheaper for the loan than continuing to service your credit card debts and you will pay it off quicker.