Credit Cards

If you have a credit card you will be aware of the fact that they charge interest on the card. You will know that when you use the card, the debits will add up and at a certain time each month you will be sent a bill. If you pay it off in full, you will pay no extra and if you pay less than the full amount you will pay interest on the outstanding balance. However, there may be other charges that you are paying on your card, that you might not be aware of and so unless you want to be paying money out unnecessarily you need to look for these.

One charge that catches a lot of people out is on cash withdrawals. With many credit cards, if you make a cash withdrawal you will be charged for it. You may even find that you will start paying interest on the amount immediately. Some cash machines will warn people that there is a charge for the withdrawal so take notice. It is sometimes easy to put in your credit card instead of your debit card when making a withdrawal and accidently take money from your credit card rather than your bank account so be very careful with what you are doing.

Using credit cards abroad can be safe and convenient but also expensive. If this is something that you plan on doing, then look hard into it first. It may be better to apply for a different credit card that might be cheaper, just for using abroad. You may find that you would be better off using a pre-paid card, that you credit before you go and use like a credit card. However, you will need to check to make sure that this is accepted at the place that you travel to. There are some great places online to research the best ways to carry money abroad so do some research before you go.

Certain shops or companies will also charge you for using a credit card. They may have a charge if you spend below a certain amount of money or they may add on some sort of fee or percentage to it. Check carefully before you pay to make sure that this is not the case. You could even ask if you think there is a chance that they may do this. It tends to be small independent retailers or car dealers or when paying utility bills online. These charges can be quite high and so it is wise to avoid them if you can, by paying in case or by debit card.

Another charge to look out for is a gratuity charge. In some restaurants this will be automatically added into the payment machine, even though it is optional. You may prefer to leave a cash tip or did not feel that the service you received deserved a tip and so you should make sure that this has not been added on unless you want to pay for it this way. If you are not sure whether it has been added on, then ask before you pay so that you are completely sure exactly what you are paying for.

It is worth becoming familiar with the terms of your credit card and when they may charge you extra. As well as cash withdrawals and using it abroad there may be other circumstances when they charge you extra. This will vary between card providers and so if you change your card or are sent a change to the terms and conditions, look at them carefully so that you can find out whether there is anything you need to be aware of. This will allow you to be more careful when using your card and be less likely to be charged unnecessarily.

Another thing to check for is insurance. Some cards are set up automatically with insurance to cover missed payments. This may be something that you think you would like, but you may not be too keen on the idea. Take a look at the insurance and what it covers you for and then you will be able to decide whether you think that it is the right thing for you. You may think that the risk is too low for you to bother with it or that you would be better off using the money for other things.

So there are many ways that you might find yourself paying out more money on your credit card than you intended. Make sure that you are careful so that you do not pay extra by mistake and be aware of where they are likely to charge you so that you will not do something by mistake that will lead to a charge that you did not want to pay.

Loan Rates

Once many people borrow money, they just make the necessary repayments and forget about it. No one really wants to think too hard about owing money or making repayments and so it is easy to push it to the back of your mind, hope the payments go out and that it will all soon be over. However, if you do this it could be costing you a lot of money.

It is wise to make sure that you cannot get a better deal on your loan somewhere else. You could be paying out a lot of money unnecessarily. You need to also consider whether the way that you are borrowing is the best and if you should consider changing.

Loan rates change quite frequently but lenders do not always inform borrowers of those changes. They do have to let people know, but they can do this by advertising rates on their website or in a newspaper and so it may not be that easy to notice. The rates could change quite considerably and they may not always change in relation to base rate changes. Although if base rates do change then it is wise to check as this is the time they are most likely to change. If you cannot easily find the rate then telephone your lender on their customer services number and they will be able to tell you. If you think it is too high, then ask them whether they can offer you a better deal, as you are already their customer they should be willing to talk you through your options and help you decide whether there is a better one to swap to.

When you started borrowing money, you may have done research into what was the best place to borrow form and included a number of factors in your decision including the cost. Cost does tend to be the biggest priority for most borrowers. However, a few years down the line, you could find that if you did the same research again, that your lender does not stack up so favourably any more compared with others. Therefore it may be wise for you to switch so that you can save money. If you do this throughout the term of the loan, then you could find that the savings really add up. However. There will be admin fees to pay when you take out a new loan and possibly fees to pay when you move away from a lender so you need to make sure that you allow for these when you are considering whether you want to switch lenders.

As well as switching between lenders you need to consider whether you should choose a completely different type of loan that could be cheaper. Look at your options and compare the prices as you may find, for example, that if you pay off a store card with a personal loan you could gain a lot of money during the term of the loan. Take a look at the different loans available and see if you can do this. If you are not sure, then it could e wise to get the help of a financial advisor. They will charge you but it should be well worth it if they can save you a significant amount of money.

You should compare you loan prices every six months or every year, the same way you should compare utility prices and other financial products. This means that you will be well informed as to how much you are paying and how much other lenders are charging so that you can make sure that you have the best possible deal and therefore keep your loan costs as low as possible. These small differences in cost will add up, particularly over the term of the loan and could make a really big difference. If you swap form an expensive overdraft to a personal loan, you will really notice a big difference too, especially if you manage to not go overdrawn again.

If you want to pay your loan off early then making sure the cost is as low as possible will really help. All the money that you save by paying lower interest rates will leave you spare money that you can put towards paying off the loan. This means that you will be able to pay the loan off even more quickly and it will be even cheaper for you.

So rather than just letting the loan payments come out of the bank each month, take some action to make sure they are as low as possible, Whatever type of loan you have, there is a chance that there may be a cheaper option available to you which would mean that you were a lot better off financially. Start doing some research now and it will not be too long until you find out how much money you can save.

Students

A student loan is specifically designed for students and will allow them to pay their course fees and living expenses while they are studying. However, the loans are often not enough money to cover things like bills, food, and books as well. It can therefore be tempting to borrow extra money to cover the costs of these things. This is not a good idea though.

A student loan is seen by most people as a means to an end. You are investing in your education and therefore the loan is a sensible one. It will take a long time to pay back but usually the interest is reasonable so this can be manageable.

Some students can be tempted to take on an extra loan to help them with the costs of student living. This could be a personal loan or perhaps a credit card or overdraft, if they cannot organise a loan. This could provide them with enough money to cover all of their costs and perhaps to have a bit of extra fun as well. This can be great and it can really add to the student experience if you have a bit more money to play with. However, unlike a student loan you will be expected to start making repayment immediately and with no income, this can be difficult.

Although student loans are a form of debt, they do not feel that much like a normal loan as they are a way of getting an education and a job. If you have an additional loan, this is more like borrowing and it can start to make you think that it is okay to borrow money for things like food and bills or to go overdrawn or use a credit card. You will begin to normalise these sorts of things. This means that once you start work, you will still be happy with the idea of borrowing money. You will be able to borrow more, because you have an income and you could find that you will start finding it too easy to get into debt and it could lead to a big problem in the future.

Many students will do a part time job to help pay their way. This will give them vital work experience and skills that they will not get anywhere else It looks good on the CV, that they have worked and teaches them how they have to work for their money. Moving on from university not only will they find that it is easier to get a job, compared to someone without work experience but that it will have given them useful skills to cope with work as well.

Many students do rely on their parents to help them out financially when they are students. It is almost expected that parents contribute something towards helping their children out. For lower income families there is a grant available, which is worth applying for but those that are well off have no opportunity to get this and therefore need to find the equivalent money elsewhere and parents would seem to be the only option. However, not all parents are able to do this and this is why some students need to find other ways to get money. Borrowing is not wise and there is no guarantee that there will be an available job. It may therefore be wise to make sure that you have enough savings before you start. There is no need to rush straight to university on leaving school or college. You can start work and build up some savings so that you can more easily manage the costs of university. If you stay living with your parents, you will not have to pay out so much as if you moved out of home and you can work hard on working and saving money. Even a year’s worth of savings could really make a huge difference and could mean that you will not have to borrow any extra money on top of your student loan. The work experience could also give you a better chance of finding a part time job while you are studying.

So if you are a student and have a student loan, it is best not to borrow any extra money. Try to save up before you go, get a part-time job or ask parents to help you out. If you do borrow money you will find that it is extremely expensive, could lead to a bad borrowing habit in later life and could mean that you struggle with bad debts before you even start your first part time job. So try hard to not put yourself in this situation; not to borrow extra money, as you will feel better and have a brighter future without so much debt hanging over you.