The State of Affairs in UK Credit Cards

A Heavy Dose of Reality

As the global economy continues to stagnate, credit consumers in the United Kingdom are facing very dire straits. It is one thing to lose your job or get laid off, but it is something else altogether when the banks hinder your ability to earn on your investment. That is what is happening in the United Kingdom, with the Bank of England freezing their rates at an all-time low. It is so low, in fact, that they may as well provide only security for your money and not an ability to generate interest. It has been this way for over a year and there is way of knowing if and when they will release the freeze.

Similarly, credit companies are raising rates on their financial products. Capital One, a much-loved company who designs programs for lower-income customers announced that they would be raising their interest rate as much as 7%. The American Express BA Premium Plus card, which is market to and associated with British Airways customers, are raising their interests as much as 10%! You can, however, find a slightly better deal by going with Nationwide, who has announced only, a small increase of about 2%.

The Bitter Truth

The raising of interest rates in your liability accounts coupled with the freezing of low rates in your asset accounts can indeed prevent you from making any money. Unfortunately, the bitter truth is that this combination could see you moving backwards in your financial portfolio. Even if your only goal is to save money for the future, be it retirement or a family vacation, your savings account may quickly be empty. What you need to do is find a way to rid yourself of the liabilities so that you get to keep more of your money.

Obviously, you have to pay bills to live. You need a place to live, you need electricity and you need to drive your car. Well, maybe you don't absolutely need some things, in the primal sense, but these creature comforts certainly make life easier. Regardless of what you might choose to sacrifice, then, you still have some things that you simply cannot live without, and in this world, it will cost you money. You do not, however, absolutely need your credit cards, or half of the things you probably bought with them for that matter.

Taking Control

Well, you can't just get rid of your credit card unless you file for bankruptcy or let things go to default. Of course, that will make things worse. You can, however, limit your excessive spending and do everything in your power to become a good credit risk. This is important because while you might not have enough money to pay off your entire credit card balance, or balances, you can transfer your balances to a single card. This is more manageable and often will get you better rates in the process.

Whether you use Barclaycard, Capital One, American Express, or a card from one of the local banks, you will find that taking advantage of their rewards programs is not only easy, but a lot of fun. Some cards, like the new AA credit card, offers rebates on things like gas, which, in a manner of speaking basically stipulates that you will get paid to buy gas. You buy fuel every day. Similarly, there are other cards that reward you for buying groceries! All you have to do is use your credit card to stock your refrigerator and pantry and you'll quickly be on your way to a rebate check.

While this practice will not exactly equate to the income of a second job, it can help you to pocket a few extra bucks every month. In the long run, this could be enough to cover the losses you might be experiencing in the freezing of your asset management portfolio. If credit card companies are going to raise the rates, this is something that you can do to avoid paying way more money than you agreed to when you signed your contract. Besides, the money you could be saving could go towards paying down other balances, like your home or automobile.