My Advice on Payday Loans

Don’t you find it difficult sometimes to pay all your bills on time? January is one of the toughest times for consumers: after most of your money has been spent over Christmas, it is now time to face the music.

If you are lucky, you may have managed to pay your credit card balance in full each month; if not, maybe you have thought about getting a bank loan with fixed interest rate so you don’t have to worry about high interest charges on your credit card.

If your financial situation is so that you are not eligible for a classic bank loan, there are such things as payday loans you can avail of, in order to tie you over until your next pay day.

Before applying for a payday loan or any other type of unsecured loan, you must do your homework: make sure you read all the terms and conditions before agreeing to any contract; if you cannot repay your loan by the agreed date, your interest can double and you may end up even more deeply in debt that when you started out. Work out a budget in advance, to make sure that you can afford the repayments on time. If necessary, visit your own financial institution (even if they have just refused you a loan) and ask for advice.

Don't Get Caught In The Credit Card Trap

It is almost Christmas and some (or should I say most?) of us are relying on our credit card to help us get through it.

Of course you already know all the tricks to avoid paying too much interest on your credit card but you may need a reminder:

1- Only put small amounts on your credit card so that you can pay the balance in full next month and not pay any interest (easier said than done).

2- If you can, switch credit card companies, transfer your outstanding balance on your new card and you will pay no interest for a specified period (typically 6 or 9 months).

3- Use your savings account to repay your outstanding balance (interest on credit card balances range from 9% to 19% whereas a savings account will only give you between 3% and 5% interest: do the maths!)

I had never paid too much attention before today at how the interest is being charged on credit card balances:

If you balance is paid in full each month, no worries, no interest is charged (I am only talking about purchases, cash withdrawals are different).

If you only pay part of your balance, interest on the full purchase amount is charged until the balance is fully paid, on top of the interest on the reduced outstanding amount. What does this mean in plain English?
If you spend €1000 in December 2007 and you decide to repay €200 each month for 5 months, you will pay interest on €1000 until May 2008!

"La morale de cette histoire": have a good Christmas but don't overspend, remember there is going to be another Christmas next year!

Who is going to have the best Christmas? Banks! Now, here is how they can afford to give away free calendars (I think I'll take a few ones for the kids!)