Using Credit Wisely

Personal Loans
Shop around and look for the best rate of interest and bear in mind that the longer the term of the loan the more you will pay.

Overdrafts
It is essential that you get approval from your bank before you do so, to avoid higher interest rates and charges.

Credit Cards
They are very convenient but they promote the feeling that you are not actually paying money for something. You can spend what you like, when you like as long as you do not exceed the agreed credit limit.

If you do not pay off the balance in full each month, you will be charged interest.

Store Cards
Store cards work in the same way as credit cards but usually attract a higher rate of interest.

Interest Free Credit
Some agreements have an interest free period only for a short time and then revert to interest bearing.

Hire Purchase
If for some reason you stop paying for goods, they can be repossessed if you have paid less than one third of the total, you can be taken to court to pay the balance.

Catalogues
The risk with a catalogue is that during the time you're paying for the items you already have, a new catalogue will arrive and you will be tempted to buy items you don't really need.

Secured and Unsecured Loans
Your loan is secured against one of your assets / property e.g. your house. If you fail to repay, the asset can be forcibly repossessed by the lender or at least they can make you sell the asset so that the amount can be reclaimed.