Lowering Credit Costs

Q.1. What should my priorities be in keeping credit costs down?

Pay off your credit card every month to avoid interest charges. If you have a balance owing on more than one credit card ask the bank about a consolidation loan. Ask your credit card company for a lower rate. If you are a good customer they may say yes. Do not take cash advances on your credit card – you start paying interest on that money immediately.

Q.2. How does my credit rating affect my borrowing costs?

The better your credit rating the more favourably you are seen as a candidate for a loan. This could result in you being charged a lower interest rate on your loan.

Q.3. What are the dangers of easy credit?

If credit is too easy to get there can be a tendency to overspend. This can create a situation in which your debts can become insurmountable and cause financial difficulty.

Q.4. How can I better understand the costs of my credit?

The continual arrival of bills can be a daunting and overwhelming situation which can seem to be getting out of hand. By taking the time to calculate the actual costs of your debts you can look at strategies to reduce those costs. Consolidating your debts is one way of reducing your costs.