• Credit Cards
    • By: D COLLINS
      3360

      With the credit crunch in full swing, many are struggling to manage their finances. For some, the idea of staying loyal to one particular bank has been thrown out of the window in order to help keep their costs down.

      Indeed, there are some savers who have chosen to hop between deals in an attempt to save themselves some money, but who could actually risk damaging their credit rating in the process.

      ‘Credit tart’ is a term used to describe someone who constantly changes bank or credit card accounts in order to take advantage of the 0% interest deals to save money. Whilst it may seem a good idea at the time, the process of hopping from one deal to another could have serious implications on your credit rating.

      By putting in multiple applications at once for services such as loans and credit cards, you run the risk of seeming not only desperate but also ill-prepared. By doing the research into rates beforehand, rather than seeing which application comes back best for you, not only will you find a better deal for yourself but you’ll minimise your risk of being seen as a fraud case.

      0% credit cards are another favourite area of credit tarts, with some choosing to transfer balances between cards when the interest-free period is due to run out. But by taking the time to make use of the interest-free period to get the balance paid off in the first place, you’ll not only sort out your finances quicker, but also ensure that there are no blips on your credit rating.

      Also, bear in mind that these interest-free periods do end eventually – whether it is after 12 or 15 months (depending on the deal) and that you’ll eventually need to pay the balance back or risk paying high-interest fees. Be stringent with your cards, keep them for emergency use only and be wary of your spending habits, or you could find yourself in difficulty in future.

      When it comes to your credit rating, it’s best to keep a check on your financial matters in order to ensure that you’ve got a healthy credit report. Each of us have one, and these chart everything we’ve done with regards to finances – from applications for credit cards to IVAs and potential bankruptcies.

      Ensuring that you keep your credit score healthy for the duration of your financial career, you improve your chances of getting a good deal in future, as well as avoiding any penalties or further debt.