How Many Credit Cards Should I Have?

There are some people that have multiple credit cards, most people have one and some people have none at all. There are pros and cons of all of these situations and it is a good idea to have a good think about them so that you can decide which of these situations will be the best for you.

Having No Credit Cards

Credit cards do attract interest as they are a form of borrowing and this means that have expenses associated with them. If you do not have a credit card at all, then there is no chance that you will have to pay out this money. However, a credit card an be an extremely useful way to pay for items such as buying things in shops as it is quick and convenient. You will also find them better for buying online because they have insurance with them which means that if the item does not arrive or is not as described the card issuer will help you to get your money back. You will also be able to get some interest free credit when you use a credit card. This is because you will use it instead of paying for an item and then only when you get the bill, will you need to pay it. It can take as long as six weeks before you are required to repay the card which means that you will get that long without having to pay any interest on the money that you have spent and it can mean that it will give you time to find the money that you need, although you will need to be very organised to make sure that you are able to pay it in full. Otherwise, you will end up having to pay interest which will outweigh the benefits of the interest free credit.

Having One Credit Card

Many people will have one credit card. This will allow them to be able to use it when they are shopping, particularly online and help to allow them to shop in a secure way and to have insurance cover if they need it. They will be able to take advantage of the credit and it will be fairly easy them to manage it and hopefully repay it in full each month. Of course, having one card means that you have a limited credit limit and you may find that you would prefer to have access to more money, perhaps If you want to buy something expensive or if you want to use it to buy lots of things.

Having Multiple Credit Cards

With multiple credit cards, it will mean that you will have access to more money which can be convenient and means that you can buy more things. However, it also gives you the potential to build up a lot more debt. It can be harder to track your spending across two cards and so there is a bigger risk that you may end up spending more than you can afford to repay. However, by having two cards, if one has a higher interest rate, you can choose to use the cheaper one and then swap if rates change so it could be handy where that is concerned.

The right option is a very personal decision. You will need to think about what will suit you on a personal level according to what your spending needs are. However, also think about your capability for repaying a card and whether you will be able to afford to repay more than one. Also think about the potential cost of two, if you do not repay in full and the consequences of that.

Will Budgeting be the Answer to my Money Troubles?

There are many people that have problems with regards to money. It could be that they find it difficult to manage each month on the money that they have or that they have loans that want to pay back or other financial difficulties. Whatever they might be then you may be looking for a solution to enable you to get back in control of your money.

How Budgeting Could Help

The reason that budgeting can help with this sort of thing is that you will be able to organize your finances. When you budget, although there are different methods, the idea is that you can more easily organize your money. You will be able to see what is going on and think about how you want the money to spent and make sure that it does get spent in that way. It can be very easy to just randomly spend money without really thinking and then notice that there is nothing left to pay the things that you need to pay for. So the idea is that you make sure that you have enough money to pay for the things that you really need and this means that you will be able to ensure that not only are you paying for everything that you have to but hopefully you will also have enough to cover loan repayments, to put some in your savings account or even to treat yourself.

What to do

The idea is that you decide how you are going to spend your money in advance. So, you might allocate a certain amount of money to certain areas or you might want to pay for all of your essentials and then use what is left for either putting in a savings account, paying off a loan or whatever. It is a good idea to think about what sort of system will work well for you. It will depend on what you do with your money at the moment and whether you already have any sort of system in place already. There are different types of budgeting and you might just want to come up with a method that will suit you and your needs. It can be good to think about what might work but if you are not sure, then find out about different ways of budgeting and see which one looks the most useful. Budgeting will only work for you if you find a method that you know that you can stick to. Therefore, it is really important to make sure that you examine them carefully and think about what will work for you. We are all different and different methods will suit some people and not others. It is important to think about whether you will need to budget some money to treat yourself too. Many people will feel deprived if they stick to a strict budget and then do not stick to it well, so it can be a good idea to budget in a treat so that you do not feel like that. Some people will not feel like that and will just be determined to stick to it so that they can get things sorted out as soon as possible. So, you will need to decide which might be the best for you.

So, whether budgeting will help you with your money troubles will very much depend on whether you are able to stick to the budget. There will be different challenges for different people and the key will be to set a budget that you will be able to stick to by designing it around the way that you are and the way that you act so that you can be sure that it will be easy for you.

Are Overdrafts Still the Most Expensive Way to Borrow?

There are many different ways to borrow money and they cost different amounts of money. This means that it is a good idea to compare them on price and see which will be lowest. You will also find that lenders will vary in how much they cost as well and so you will need to compare them as well. However, you will need to note that there are reasons for these cost differences and you need to consider value for money as well. This is because you will find that there are some loans which will be better suited to you and your needs than others and you will need to do your best to identify these. There are some loans though, that you may feel that you want to avoid because they are known to be expensive. It used to be the case, for example, that overdrafts were considered to be potentially, one of the most expensive ways to borrow money. However, there has been an overhaul of the overdraft charging system and so things have changed. You may wonder whether they are still expensive or whether they are now more competitive.

How They Were Previously Charged for

It used to be the case that there were tow types of overdrafts. There was an arranged overdraft where a bank would offer a borrower a certain amount for money that they could use if the wanted. This was charged at a specific interest rate and there was often a monthly charge as well. Some people would borrow more than they were allowed which was called an unauthorized overdraft and this was usually charged at a much higher interest rate and they might have a daily charge as well. This meant that if people kept those overdrafts for a long time the charges could build up really quickly and it could be extremely expensive. In the end the government stepped in and brought in some new regulations with regards to overdrafts. 

How They are Now Charged for

The new rules meant that there could no longer be two levels of overdrafts. The idea was that the banks would just offer an authorized overdraft and that was all that they would be allowed to offer which would mean that less money could be borrowed so people could not get into such a high amount of debt. They would also be limited on what they could charge. It was deemed that it was confusing that they were charging interest and fees and people would not really know what they were going to be charged. Therefore, it was felt that if they only charged an interest rate then it would be really clear to the customers who was the dearest and who was the cheapest as well as being able to see how much it would cost them. This means that nowadays overdrafts are charged at around 35% – 40% interest. This is more expensive than some types of loans but there are loans that are dearer too and borrowers will easily be able to compare them and work out which will be the best for them.

How Competitive They are

It is well worth doing this and working out how they compare with other types of borrowing. With things like credit cards, it is likely that some will be dearer and some will be cheaper, it will depend on the card issuer as to how much they will charge. There are some types of loans which traditionally will tend to have low interest rates, such as mortgages but this is because they last a long time and this means that you will pay more over time. Rates vary between lenders too, so you will need to do some comparisons yourself to work out which looks like it will suit you the best.

How Does Credit Scoring Work?

We hear a lot about credit scoring and how we need to make sure that we have a good score, but it can be confusing. Many of us are probably unsure about what it actually means and how it works.

What is a Credit Score?

The term credit score is actually inaccurate. It implies that there is a standardized system where people will calculate a credit score and will therefore have a figure and then decide whether that figure is high enough for them to accept it. Unfortunately, there is nothing of the sort. Each person looking at your credit record, whether that is a lender, landlord or whatever, will just loo at the information on the page and make a judgement based on it. They will decide whether they feel that it fits in what they personally think makes a good credit record. His means that it could be the case, that one lender will like a particular credit record and one will not. This could be because they are looking for different things.

These are some things which it is likely that they will be looking for. They are likely to be looking to see whether they think that they can trust you. This means that they are likely to be thinking about whether you have repaid loans that you have taken out in the past, if you are making payments as expected on utility bills or mobile phone contracts and things like this.

Who Uses it?

As mentioned, lenders will be interested in your credit report. If you want to take out a loan, most of them will want to check and make sure that you are capable of repaying it. They will do this by looking at whether they feel that the evidence on the report points to them being able to trust you to make the repayments on the loan. They are not the only people that will look at it though. There are landlords as well. When you apply to rent a home, the landlord or letting agent will do a credit check. They will want to be sure that they can trust you to pay the rent on time and every month. You may also find that utility suppliers and insurers use it as well. They might want to see whether they can trust you enough to let you pay in monthly instalments or whether they should not. An insurer may insist you pay for the year in advance and utility supplier may fit a prepayment meter. You may even find that there are some potential employers that might use it. They might want to check that you can be trusted around money or that you will not be likely to be bribed, which could be more likely if you are not managing your money well.

How to Improve it

So, it can be a good idea to make sure that you do what you can to make your credit report look as good as possible. Obviously, with no agreement on exactly what makes a good one, this is not easy. However, you can use a common sense approach It is worth making sure that you make all payments and loan repayments on time so that you are able to prove that you will be able to do this when you have a loan, rent or other payments to make. It can also look better if you do not have that many loans as otherwise they may worry that you will be spending a lot of money on repayments and there may not be much left. They may also see lots of loans or loan applications as an indication that you are struggling to manage your money.

Why Payday Loans are Useful for Emergencies

If you have some sort of emergency and need money really quickly, then it can be difficult to know where to turn. Borrowing is often the only option available to many people and there are lots of them that will turn to short term loans. These are a very specific type of loan which are not offered by traditional lenders which means that there are a lot of people that have never used them and probably do not know much about them. It is wise to find out about them because you never know when you might need some extra money in an emergency and these loans could be really handy for you. This is because they were actually originally set up to be able to provide money in emergencies and therefore they have some specific features which will be really useful.

Can Get the Money Quickly

Payday loans are designed to get money to the borrowers quickly. This means that once the person has applied it can take as little as a few hours for them to have the money in their bank account. This can vary between lenders though and so if you do need the money this quickly, you will need to think about checking with the lenders to find out whether they will be able to offer you this service. You will also find that there will be some payday lenders that will open outside of normal business hours. This will mean that you will be able to get money at weekends or at night, if you need it and this could be useful to some people. Not all lenders will offer this, so again, you will need to check, if it is something that you think that you will want.

Simple to Apply

It is very simple to apply for a payday loan and this means that it can be useful as it means that you will be able to get the application done quickly. You will normally apply online but there is usually a telephone application option as well. It means that it is quick and should not be fiddly or too time consuming. Everything is clear and easy so that you can get it done as quickly as possible. You will not have to worry about filling in paper forms or anything like that, which can be quite a daunting prospect for some people.

Most People Get Approval

Most people will get their applications approved for payday loans. Unlike normal loans, where a credit check is used to determine whether your application is approved, a payday lender will tend to lend to most people. They will need to be able to confirm your identity and address and you will need a bank account and an income and that is all you will need to be able to qualify, as long as you are over the age of 18 years. It means that if you need money desperately, but cannot borrow elsewhere due to your credit record, then this sort of loan could be very handy for you to consider trying out.

Quick to Repay

A payday loan is also quick to repay. This can be helpful for those people that do not want to be in debt for very long. The money ha to repaid in full when you next get paid. This is because ethe loans are designed to help people manage until they next get paid. So, they will only last for a few weeks or maybe even days. It can be good to know that it will be repaid very quickly.