Managing money is something that we all have to do. It might not be the most thrilling thing in the world but it is certainly vital and makes good financial and common sense. There are a few different financial tools that you can use to help successfully manage your money and make the most of your finances. Two of these are credit cards and share ISAs. This article looks at a few of their main features and how they can help people who are looking for money management strategies.
Credit cards – interest free
When it comes to credit cards, interest free credit cards are a really good option if you are looking to get control over your finances. This is because, as their name suggests, interest free credit cards allow you to make purchases and then pay them off over an extended period without having to pay any of the interest you would normally be expected to pay.
This has the benefit of often helping people to pay off what they owe faster than they otherwise would have done. One thing to keep in mind with interest free credit cards is that the interest free period will normally be for a limited time only, and so it can be worth paying off your balance before this runs out to avoid accruing any interest on the balance of your card.
Credit cards – 0% balance transfers
0% balance transfer cards can also be a good way to help manage your money. For instance, it is estimated that there are more than 30 million credit card users in the UK with upwards of 58 million credit cards between them. This means that most people with credit cards have more than one, something that is fine for most people but some can find it harder to manage.
0% balance transfer cards are useful if you are looking to consolidate multiple credit cards down into one card. They allow you to transfer over the balance of existing cards and then pay off the balance at a 0% interest rate, so the only fee associated with it will be the administration costs of taking care of the balance transfer.
Again, this is something that is very useful in helping people to pay off what they owe faster and more cheaply than they otherwise would have done. Just remember that any other purchase you make on a 0% balance transfer card will be charged at the normal rate of interest.
Credit cards – limits and payments
Credit cards also have a few other benefits that can help people looking for a money management strategy. For instance, when you are accepted onto a credit card you will be given a credit limit that tells you how much you can spend on your card each month. Also, as a consumer, you have the right to ask for your credit limit to be lowered or to reject any limit raises that are offered to you. If you are trying to keep down the amount of money you are borrowing, this can be helpful.
Something else helpful about credit cards is that items that incur a higher rate of interest are paid off first. This helps to keep down the amount of interest you pay overall and can help pay off balances quicker. For instance, if you have a 0% balance transfer card and transfer over £500 at 0%, but then spend £250 at the standard APR, the £250 would be paid off by your credit card lender before the transferred balance would be.
ISAs – regular saving
Share ISAs are also helpful for many people. You are probably aware that ISAs are a tax-free form of savings; every year you are given a limit for how much you can save tax-free in an ISA. Cash ISAs are common, but if you go for a share ISA then you will be able to save more over the course of the year because as well as the cash element, there is also a stocks and shares element to the product. This means that ISAs are particularly good for people who like to save regularly and want to take advantage of the tax-free interest.
ISAs – potential for investment
Something else offered by share ISAs is the potential for investment: some of the money you invest will be put towards stocks and shares. While the stock market can naturally go down as well as up (meaning there’s a chance you could get back less than you put in), this investment choice can be a good option for people who are thinking about long term financial solutions and are interested in the potential offered by stocks and shares investments.