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Using your credit cards to balance your finances can have a negative impact in the long run if you cannot keep on top of it. Credit cards or even store cards can be great when used correctly; the key is knowing when to pay off your credit card to streamline your household finances. If you aren`t sure what the consolidation loan or remortgage route would cost you then, contact us on 
Credit cards can be an effective way to borrow money but it is essential to remember that they should be used for short term finance, not to keep your household budget afloat in the long run. That credit card that you took out last year to buy a TV and refurbish the living room, if it hasn`t been paid off, or even if you are only making the minimum payment, the debt on the card will keep on growing. The only way to stop this spiralling out of control is to pay off the credit card in full or make payments every month which are larger than the interest you are being charged. We understand that it can be easier said than done. If you are lucky enough to have some savings in the bank you could use these, if not you need to find some other way to pay off your credit cards. If you would like information on possible ways to clear your credit cards or would like to work through some payment examples check out our handy Credit Card Debt Consolidation
Video transcript
With Credit Action indicating that we had a whopping outstanding balance of £55.5 billion on plastic as of March 2013, it could be the perfect time to look into credit card debt consolidation with First Choice Finance.The same figures show that the average interest on plastic was 17.22 per cent, much higher than the Bank of England's 0.5 per cent base rate, with two-thirds of credit cards in the UK having outstanding balances bearing interest.
This means that many of us could be paying back our credit card debts with significant rates of interest and if you are not paying back the capital the balance will only stay the same or increase, so if you've got a number of pieces of plastic in your wallet, you could look into a consolidation loan to reduce the amount you pay back each month.
A secured loan, also known as a second mortgage like this works by taking out a loan against your property and using those funds to repay all of your unsecured debts – that's not just credit cards, but also personal loans and finance deals you may have taken out on something like a new car or conservatory.
Opting for this method leaves you with a single repayment each month, which will be easier to keep track of, and it should be for a lower amount, as the average rate of your other credit may be higher and you'll pay the capital you owe back over a longer period. Just bear in mind that this could result in you paying back more interest over the life of the loan. So it’s a balance of monthly improvements now to avoid getting into a bad credit position and checking you are not paying back to much. To give you an idea of how the figures vary with different rates and terms try out our easy to use debt consolidation or remortgage calculators on the website.
See how credit card debt consolidation could work for you by calling First Choice Finance and speaking to our in house finance advisers on 0800 298 3000 from a landline or 0333 003 1505 from a mobile. Alternatively, you could visit our website and enquire online at firstchoicefinance.co.uk.
