Should You be Lured by Credit Cards?
In these days, more and more people are facing huge debt and one of the main reasons is their use of the credit cards. These people who are guilty of frequently using the plastic somehow ignore the high costs involved or it can be that they don’t have enough knowledge.
If only these credit card owners read the news, they would have known that the plastic is an expensive form of credit and that it’s been found to be one of the major factors that cause people to go into debt. In fact, it’s been reported that in the United Kingdom, there are more credit cards than there are people.
Data shows that as of 2006, there were more than 74 million credit and charge cards in the UK. As of 2008, there were 30.2 million adults owning credit or charge card with 20.5 million using them regularly or at least once monthly to make purchases. Purchase volumes using the plastic are expected to go up to 2.8 billion in 2018 amounting to 216 billion sterling pounds.
On the other hand, data from the Bank of England showed that consumers in the U.K. owe some 61.5 million sterling pounds to credit card companies in January this year. This figure is up 15 percent compared to the previous year.
Today, people should have more reasons to stop using their credit cards or eliminate it from their lives. Firstly, interest rates or the so called annual percentage rate (APR) have gone up. Secondly, high street banks have implemented more stringent rules. Thirdly, there are hidden charges that many card owners may not even know about.
Sadly, there are still many people easily lured to the plastic. It seems they’re being magnetized by the credit cards when in fact, there are other more affordable credit options which they can take advantage of. Recent reports revealed that some one million consumers turned down by banks are opting to avail of high interest credit cards. They don’t mind at all even if the interest rate is a high 60 percent.
These high interest credit cards are normally targeted at consumers who have an unfavorable credit record. These people have failed to obtain loans and other forms of credit from banks.
Banks have been carrying out more stringent policies for borrowers to protect themselves. They now refuse to provide loans to people who don’t have a sound financial situation and at risk of not paying their repayments on time. Even applicants with a record of not being able to pay just a single bill or failed to pay on time are already turned down outright.  Those who are lucky enough to avail of a bank loan, however, are charged a higher interest rate.
An affordable alternative for those with bad credit is the short term unsecured loans. Financial experts have found this to be a better option which could allow borrowers to enjoy savings in the long term compared to using the credit cards. And since most of these lenders now operate online, qualified consumers can conveniently apply and wait for their money in just a few hours.
