Do you know your credit card balance?
A worrying one-third of people in Britain who don't clear their credit card debt each month admit they have no idea what the outstanding balance is on their account.
With credit cards becoming a common part of making big purchases or shopping online, the majority of us will have at least one in our wallets and for most it will be a useful tool for short-term borrowing. In May this year, purchases of £13.1 billion were made across the UK on credit cards, according to the UK Cards Association.
But with so many losing track of what they owe and more than half telling credit reference agency Equifax they don't know what their interest rate is, some consumers are storing up trouble.
Neil Munroe, external affairs director at Equifax said: "It seems that many UK consumers are living on a financial knife-edge. Even with the latest news that inflation has dropped, it's still hard for families to balance living costs with many not having a salary increase so far this year."
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Citizens Advice Bureaux in the South West dealt with 25,930 problems involving credit cards, store cards and charge card debts last year.
The organisation says using a credit card can be a convenient way to pay for goods and services and give you more choice about where you shop - but can work out expensive if you can't pay off the whole amount you owe each month.
An adviser said if someone was struggling to pay a credit card bill, they should contact their card provider to discuss the problem as soon as they can and ask for interest to be frozen so that the debt doesn’t go up.
Financal experts at Moneysupermarket said sitting down with your statements to establish how much you owe was the first step.
If you have a large balance outstanding or small balances on several different cards, which you are paying a high rate of interest on, and you aren't in a position to pay these off immediately, you should switch them to a card which offers a 0% introductory rate on balance transfers for several months.
Here are some more tips from Moneysupermarket on the credit deals currently on offer:
>b>Best for balance transfers
The market-leading credit card for balance transfers is Barclaycard's Platinum Credit Card with Extended Balance transfer. This offers 0% on balance transfers for 22 months, as well as 0% on purchases for three months. There is a 2.9% balance transfer fee, and, after the introductory period, the card has a representative annual percentage rate (APR) of 17.9% (variable) so you should try to pay off what you owe before this kicks in.
Halifax's Balance Transfer Credit Card also offers 0% on balance transfers for 22 months, but comes with a slightly higher 3.5% balance transfer fee. The card also has a representative APR of 17.9% (variable) once the introductory period ends, so again, you should try to pay off what you owe in the first 22 months.
If you want to pay a lower balance transfer fee, then Barclaycard's Platinum Credit Card with Balance Transfer Card has a 21-month 0% introductory rate on balance transfers and the transfer fee is 2.6%. This card also has a representative APR of 17.9% (variable).
Remember that the best balance transfer deals will only be offered to those with excellent credit histories, so if you have missed payments in the past, you are unlikely to be eligible.
Best for purchases
Once you have sorted out your existing credit card debts, you should make sure that any new spending isn't costing you more than it needs to.
Royal Bank of Scotland and Natwest's YourPoints World MasterCard Special Cards both offer a market-leading 18 months at 0% on purchases. After this, the cards have a representative APR of 17.9% (variable). You also earn points when you spend, which can then be redeemed in stores including Marks & Spencer, Boots, Amazon and Harvey Nichols.
Other competitive purchase cards include the Tesco Clubcard Credit Card, which offers 16 months at 0% interest on purchases and 0% on balance transfers for nine months.
If you shop at Tesco this card doubles up as a Clubcard, so you can earn points when you spend - whether that's in store or anyway else. Once the 0% purchase period ends you will be charged a representative rate of 16.9% (variable) on any purchases, so you should make sure you have paid off what you owe within the 16-month introductory period.
Similarly, the American Express Platinum Cashback Purchase Card also offers 0% on purchases for 16 months, as well as 1.25% cashback on your spending. This card is available exclusively to MoneySupermarket users and comes with a £25 annual fee. After the introductory period ends, the card has a representative APR of 18.5% (variable).
Alternatively, the Marks & Spencer Credit Card offers 15 months interest-free introductory period on purchases. After 15 months, the card charges a typical representative annual percentage rate (APR) of 15.9% (variable), so you should make sure you clear your debt within the interest-free period to avoid paying interest.
As well as offering a lengthy interest-free period on purchases, you also collect points whenever you spend using the card. You earn one point for every £1 spent at M&S, and one point for every £2 spent elsewhere.
When you've taken control of your credit cards, make sure you regularly review the interest you are being charged, as well as how much you owe.
With so many competitive cards on offer, there's no reason to pay steep rates of interest and you'll be able to clear your balances much more quickly if you take advantage of the many cards offering 0% introductory rates.
You will need to be disciplined though - always make a note of when the introductory periods are ending and either try to pay off what you owe before then, or move your balance to an alternative card.
For more information on credit cards and advice on debt see tips from Citizens Advice at http://www.adviceguide.org.uk/england/debt_e/debt_borrowing_money_e/debt_credit_cards_e.htm or call Citizens Advice Bristol on 08444 994718 or find the Bristol Advice Point at 1 Quay Street, which opens at 9.30am, Monday-Friday, for drop-in assessment sessions.
Please note: Any rates or deals mentioned in this article were available at the time of writing.