Consumer Credit Advice

10 Tips on Consumer Credit

Using a credit card, instant credit in a shop, catalogue shopping, using a store card - when it comes down to it you're borrowing money!  If you're going to use credit then these ten tips will help you to borrow safely.

1. Can you afford it?  Before you commit yourself make sure you can really afford the repayments - don't be talked into borrowing more than you want to.

2. Shop around for credit.  The first thing you're offered may not be the best deal.  There are many types of credit and numerous rates on bank loans, credit cards, hire purchase agreements and so on.  Don't pay more than you need to.

3. Read the forms before you sign.  If you don't understand them get help from Trading Standards or your local Citizen's Advice Bureau.

4. Check exactly how much you'll pay back including interest rates and charges, is it good value?

5. Compare the APR's.  This is the easiest way to compare similar credit products - so if you're looking at credit cards, for instance, go for the one with the lowest APR.  Usually the lower the APR the less you pay in interest.  Sometimes a low APR is only offered for a short period.

6. Watch out for other charges such as broker's or arrangement fees.

7. Look at the length of the loan not just the monthly payment.  The longer the loan period, the more interest you'll pay.

8. Watch out for optional extras.  Sometimes payent protection insurance (PPI) is included when you haven't asked for it.  You don't have to take this up and it may not cover you if you're self-employed or on a short term contract.  If you have been mis-sold PPI you may be able to claim back compensation. 

9. If you use your home as securityfor a loan and you don't keep up repayments you could lose it.

10. If you act as a guarantor for someone else's loan you will have to repay the debt if they don't.

Don't Let Credit Turn into Debt

Striking Numbers!

• 8,004 new debt problems are dealt with by the Citizen's Advice Bureau every day.

• £57,635 is the average household debt (including mortgages).

• £1,452 billion UK personal debt was the figure at the end of January 2011.

• £179 million a day is paid in personal interest in the UK.

• 1,000 people a day seek some form of formal debt rescheduling.

• 337 people every day of the year will be declared insolvent or bankrupt. This is equivalent to 1 person every 59 seconds during a working day.

Figures compiled January 2011 by www.creditaction.org.uk

Debt Advice and Help

Many organisations offer free help and guidance on money matters. Always get free, independent help before you pay a commercial service.

Doncaster Citizens Advice Bureau (CAB)
Doncaster Citizens Advice Bureau is a good starting point for free advice. They provide free information and advice on legal, financial and other problems.

National Debtline
National Debtline offers free, confidential and independent help over the phone for people in England, Scotland and Wales. You can call their helpline on 0808 808 4000 (free for BT Customers) between 9.00 am and 9.00 pm from Monday to Friday and from 9.30 am to 1.00 pm on Saturdays (24 hour voicemail). You can also email and write to them.

Consumer Credit Counselling Service (CCCS)
Free, confidential debt advice, debt solutions and help with budgeting, debt management and bankruptcy. Anonymous advice is available from CCCS Debt Remedy - their online advice tool.