Everyone knows that the economy is tight. Some people are finding it necessary to fall back on credit cards in order to survive the recession and the rampant loss of jobs. While this may not be the wisest thing to do, there are sometimes few if any other alternatives. This is especially true since the banks have put extremely tight restrictions or all out bans on lending for the foreseeable future.
So what’s a person to do?
Credit cards are most definitely a double edged sword. One needs credit for nearly everything these days, from planning a holiday to finding the latest greatest deals online. Credit is also imperative if one wants to get a mortgage or car loan at some point. So why do many financial analysts say that we should avoid credit cards like the plague? The answer is the high interest rate.
Like most people, I get a lot of credit card offers. The other day I saw one that was offering a “rebuild your credit” special with an interest rate of 33.9%. 33.9%! Ouch!
We have quite a few credit cards with good rates and a 0% rate on balance transfers. This is where using a credit card can be smart. If you transfer a current balance with a 20% interest rate to a card offering 0% for a period of X months, the amount of money you will save is phenomenal.
Take a look at the top three with the lowest rates:
Halifax
Bank of Scotland
Virgin
Remember to pay them off at the end of each month and you’ll definitely be on the right track.
Tags: Bank of Scotland, Halifax, Virgin
