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Say No to the Plastic Card this 2010

Many of you may have heard a lot about the negative side of using credit cards in the past year. After being made aware of the high cost of using the plastic card, ask yourself then if you will still continue to use it on a frequent basis now that a brand new year has started.

If you’ve been keeping track of the latest financial news in the U.K., one of the headlines that will greet you is about the interest rates on credit cards. The Bank of England revealed that the average credit card interest rate went up in December last year adding burden to people who are still struggling with their new year debt. The bank’s confirmation showed that the rate rose by 0.39 percent from 15.89 to 16.28. This rate is considered to be the highest since September 2006.

The ones badly affected by this bit of news are those who used their credit cards for most of their purchases for the holiday season. And just so you know, an estimated one million people actually used their card in paying for their mortgage and rent in 2009. This finding based on a research done by Shelter only showed the desperation of people to make both ends meet amid the global recession that badly hit the U.K. last year. Experts also believe that should this reliance on the credit card continues, many people will surely be left homeless.

Sadly, many credit card owners are unaware of the high fees involved whenever they use the card. So while they were struggling with their difficult situation last year, they depended on their cards for most of their basic needs. Those guilty of this comprise people who were laid off from work and those whose salaries were cut which made life harder for them.

Those who took out payday and cash advance loans in addition to using their credit cards   suffered the most. But then, who could blame them? They may not have other available resources the reason for taking advantage of the loans.

But this should not be the case if only credit card owners and borrowers take action now to settle their debts. Freezing the use of the plastic card is one of the recommended steps towards gradually eliminating debt. By focusing only on paying off the balance, owners can slowly solve one of the sources of their financial problem.

Short term loans should be settled as well even before their maturity. Once the card is eliminated, it would be better to turn to the loans for your cash requirements but not just on a frequent basis, only when the need arises. Taking out loans is more affordable than using the plastic card.

It is possible to do these steps especially now that the outlook for employment is positive. People only need to be resourceful and find more jobs to increase their income. It wouldn’t hurt to have two part time jobs if you’re bent on earning more this year. Whether home based or office based, there’s work available you just need to find one that matches your skills.