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MONEY MATTERS by Scott Woods: Get savvy with credit cards this Christmas

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With Christmas fast approaching and pre and post-festive season sales to tempt us, our wallets will undoubtedly be relinquishing control of our ‘flexible friends’ on a regular basis. So how do we keep our cards both flexible and friendly?

By using credit cards sensibly, we can benefit from them. Some companies now insist on a direct debit being set-up to run alongside the credit card and this is a useful feature. It removes the necessity to remember by what date your payment is due and therefore could avoid some expensive and very annoying late payment fees.

The direct debit payment option normally gives you a few options as to the amount that will be collected each month.

By paying what you afford and not just the minimum required you will reduce the balance owed much more quickly. This can save thousands of pounds over the life of a card.

By using a credit card rather than cash, particularly for bigger transactions, you will benefit from the extra protection offered by the Consumer Credit Act (CCA) 1974.

When you spend between £100 and £30,000, section 75 of the CCA will mean that the credit card company is jointly and severally liable for any breach of contract or misrepresentation by the company.

Identity theft is a multi-billion pound threat and credit cards are a fraudster’s favourite.

While some people view it as somebody else’s money that has been stolen, it can take some time to reclaim the funds and to rectify your credit file, so check your statement on a monthly basis to look for unusual or suspicious transactions

Finally, as you have to shop around for savings and ISA accounts, so you have to keep an eye on what offers are available on credit cards in the marketplace. If you run a card with a balance, by switching to an ‘interest-free’ deal (being mindful of the usual 3% or 4% fee), then you save plenty by reducing the balance and therefore any future interest payment much more quickly.

 

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