Fight the Credit Crunch

When you click on a site with that title, what would you expect? Helpful tips on saving or making money maybe. Because, as we all know, what we don’t need now is to buy on credit; more to spend on more luxury items to be used once in a blue moon. Well I clicked, looking for helpful tips, only to find a credit comparison site. With all the hype about banks not lending, I can guarantee, however bad your credit rating, some company will still lend you money, for a higher interest rate because of the risk of lending to you. Never forget that credit card lending is the most expensive form of debt and you should only use a store card if you intend to pay off the full balance before interest is added to the account.

There has always been companies who lend to almost anyone asking for higher monthly repayments or an exorbitant arrangement fee. Furthermore, some will give you the impression that credit is only available if you take out certain credit protection insurances. Although the monthly repayments on these products seem small, as we all know it soon adds up. The worst thing about them is that they can give you a false sense of security. Before signing up you need to read the small print very carefully and if there is something you need explaining ask and then ask for confirmation in writing.

So how do we “Fight the Credit Crunch?” The first step is to work out your monthly outgoings and compare them to your income. Hopefully, you will have more money coming in than going out of your bank account each month. If not, you need to consider asking for help now before it becomes a major problem. Make an appointment with you local Citizens Advice Bureau to talk to an adviser. They are highly qualified and not paid so they are not there to sell you a product, but to give good solid legal advise on debt and housing problems.

Remember, if you have debt that isn’t secured against your house, it goes to the bottom of the pile for repayment. Second, if you can make, in writing, a reasonable repayment schedule then you are less likely to be taken to court or have the bailiff visit you.

The Citizens Advice Bureau can and will go through your debts and help you do this. Don’t be tempted to go to a private company for advice as they may just sell you a consolidation loan payable over a longer period of time, often at high interest rates, usually with an arrangement fee and almost certainly costing you far more in the medium to long term. There are far more effective ways to help yourself.