Higher inflation may cause more reliance on credit cards

Credit cards can be helpful, if they are used appropriately.

10:29 21 June 2013

The rate of inflation has increased to 2.7per cent. The Bank of England reportedly believes that inflation will exceed 3per cent sometime this year.

 

Consumers could be feeling the impact on their finances, and it may be more difficult to try and stash money away in a savings account.

 

It might be more difficult to make ends meet for some, and people may increase their reliance on credit cards for everyday essentials.

 

Here are a few ways you can make the most of your credit cards during a difficult financial time:

 

•    Balance transfers—if you’re trying to free up some extra money in your budget, you can analyze your bills to see if you can pay off smaller bills or loans with a balance transfer. Some credit cards offer impressive interest rates for balances that are transferred to the cards. Make sure you check on the rate and length of time that you will have the rates.

 

•    Introductory offers—many credit cards provide customers with exceptional introductory rates. This is sometimes exclusively for new purchases, but if you do need to purchase on credit cards, make sure you know the introductory rates available to you.

 

•    Consolidate debt—this might be the perfect time to use the credit cards you have to try and consolidate debt.  You can put bills with higher interest rate amounts onto the credit cards with lower interest rates, which should reduce your minimum payments overall. It’s best if you’re able to pay an entire bill off with one of your credit cards, or by putting various amounts on multiple credit cards.

 

•    Discipline—it’s not everyone’s cup of tea, but when finances are tight and there is less money to go around, it’s important to make comparisons to purchase the most economical service or product. Money need to go farther when inflation is worse.