Card confusion
Question
I keep getting letters offering me what look like good deals on credit cards. I've never had one and people keep telling me they're a bad idea but I really could do with the extra cash. Should I get one or should I steer clear?
Answer
Credit cards are neither good nor bad because it depends on you, the user, as to whether they are a positive aid to your life or become a problem. They can be very useful when you want to buy something and don't have the cash on you, or you want have the added protection they offer if the goods are faulty. But balanced against the positives, are the negatives of the high interest rates they charge when you don't pay off the credit at the end of every month.
The area where you need to take real care is when you use your credit card to take money out from a cash point because some cards charge interest, again at very high rates, from the moment you take the money out. The Financial Services Authority (FSA) can give advice on what to watch out for.
If you are looking to borrow some extra cash to make a special purchase you might want to consider borrowing from a bank or building society but remember to shop around and see what the best deals are. Or you might want to consider using a credit union to borrow money. These are small cooperative organisations that run in many parts of the country.
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Question answered by CAB
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