Buying on a low interest credit card can bring its own problems,
but it can give you extra rights too. Sometimes it's not
always easy to get the right deal, many products currently
on the market are less than generous.
It is as important to shop around for your finance as
for any other product. There's no easy way out of debt,
but the sooner you face up to the problem, the easier
it will be to solve.
Most people at some time will use finance to purchase
goods or services, for example, by obtaining a personal
loan through a bank or building society, hire purchase,
or a credit agreement with a trader. Before buying anything
on finance you should consider the following points. Work
out what the total cost of the loan will be. Shop around
for credit: how much will a loan cost to repay each month
and for how long? Check also the annual percentage rate
of charge (normally referred to as APR). Generally speaking,
the lower the APR the better the deal.
Some traders offer interest free finance (0%APR) but
you will need to take care that you are not paying higher
amounts in other ways; for example, it may be a higher
cash price than you would pay for the same goods elsewhere.
Make absolutely sure you have read and understood the
agreement before signing. If there is anything you do
not understand, ask.
Make sure you can afford to pay back the loan and still
have enough to cover all your other commitments. Check
whether the loan has a variable rate of interest. If it
has, your repayments can go up as well as down. Make sure
you can really afford it. Some loans are only given if
they are secured on your home.
These are not available if you rent. A secured loan gives
security to the lender, not to you. If you cannot keep
up with the repayments the lender can sell your home to
cover any loss. You might get a lower rate of interest
with a secured loan but you could have a lot at stake.
(Source : http://www.oft.gov.uk)
