Credit cards are a wonderful thing. It’s a guarantee that you’ll never ever be without. No worrying how you’ll fill up the car with petrol when you’ve £7 left till payday or when your shoe starts taking in more water than your kettle. It’s our flexible friend as long as your 0% still has months to run or you only use for emergencies and pay it off each month, in full when you get paid.
What happens though when you’re sitting with a £4000 balance on a high interest rate card?
The average credit card interest rate is 17.5% according to the Money Charity which means you will pay approximately £700 in interest per year if your balance sits around the £4,000 mark. Let’s be honest, does it ever really move? If you clear £500 off your credit card one month chances are, you’re spending it again the month after because you run out of money.
Why do you run out of money?
Because you’ve cleared a chunk off your credit card this month…. Obviously!
Now not everyone will qualify for a 0% credit card. They are usually only offered to the exclusive ‘can pay will pay’ club so if your credit is in tip top condition, it could be worth your while, especially while Barclaycard are offering a 0% card for 30 months!!
Based on a £4,000 debt, you could clear your feet and avoid any interest for just £133.33 per month, this is a great alternative to a consolidation loan or a never ending minimum payment, maximum interest card. You know you want to!
If you own your own property and are currently on a standard variable rate, then consider re-mortgaging now. If you’re currently on a 4% SVR, switching to a 3% fixed rate, on a property worth £200,000 could save you over £600 per year!
Another necessity which you could save on is utilities. You may have been with Scottish Power all your days and your granny before you etc. however being a loyal customer when it comes to energy companies gets you nothing.
No Parker pen when you get to 5 years and certainly no discount or price cap for the rest of eternity as long as you stay, so move! If you’re tied into a fixed contract after recently capping your price till 2016 then you’ll just have to ride this one out but the rest of us should shop around and move to the most attractive deal. This goes for all providers and insurers including broadband, car insurance and so on.
You have no loyalty there, move on folks!
Another large monthly expense to cut back on is groceries. Stop being such a food snob, Aldi digestives dunk just as well as McVities and are half the price! I remember as a child being told a story about spark plugs and how the only difference between the cheap ones & the expensive ones was they had the word Ford stamped on them. This tale was told to me following my refusal to take a packet of own brand crisps to school for fear of being slagged.
If you’re really that bothered about the number of tomatoes in own brand ketchup compared to Heinz then there is actually a website you can peruse at your leisure;- www.thesupermarketownbrandguide.co.uk.
These are just a handful of the ways you can put more money in your pocket without it affecting you in any way. You won’t miss out on anything and with the money you save, why not consider planning for the future? Clear your debt, set up an ISA or consider increasing your pension contribution.
Ensure you bring in next New Year, more cash savvy with a bit of cash in the bank and look forward to financial security in the years to come.