Financial Intelligence
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We’re bombarded on a daily basis by a UK media that frowns upon credit card debt, and that wags a finger in our faces at even the thought of using credit cards to spread the cost of goods or services we can’t quite afford.

It’s fair to say that there are cheaper ways of borrowing money, but few offer such an intoxicating mixture of flexibility, purchase protection and immediacy.

So if you have a collection of plastic in your wallet and you feel like giving yourself some personal pride points for slimming down your purse or wallet during the bleak, post recession austerity, maybe you should consider a private audit of your credit cards.

Do you really need them all? What are they costing you, and what affect are they having on your credit rating?

Its good practice anyway to review your credit card terms once every three to six months just because often card issuers will have made a promotional initial offer (like 0% on balance transfers for 6 months) to gain new business, but once the promotional period is over charges or interest rates may return to their higher normal rates. You maybe better off switching credit cards, or even closing some accounts. So how should you compare and rate your plastic?

Do:

* Consider closing unused or idle accounts. These accounts could be charging you unnecessary fees and are often targets for identity theft. Close the accounts with low overall benefits or with annual fees and higher interest rates first.

* Be aware that you can put the brakes on accounts that have a high interest rate and an outstanding balance. Ask your credit card issuer to close the account to new charges and then pay down the balance as quickly as you can. This is a good way to reduce overall costs. If you have to carry an outstanding balance, make sure it’s concentrated on the card with the lowest interest rate, or consider a new 0% balance transfer credit card, and then close the more expensive ones.

* Periodically check your credit reports online to see the status of your accounts. Look for wrong information on late payments, high balances and signs of identity theft. Your credit report reflects how lenders look at how financial responsible you are, make sure all the information there is accurate and up to date.

Don’t:

* Be careful closing your oldest credit card account, this may have an affect on your credit rating as card issuers and lenders like to see a long track record of borrowing within the cards terms and conditions.

* Don’t close several accounts all at once. Gradually paying down and closing accounts is the safest way forward if you’re unsure about the impact on your credit score or the amount of debt you need to carry. If you want to cancel several credit cards, space the closures over time reducing the chance of attracting negative attention from potential future lenders, say if you want to get a personal loan or mortgage.

* Its good to concentrate outstanding balances on cards with the lowest interest rates, but don’t overload any one or two cards. Your credit rating looks best if you’re using less than 50% of your available credit limits.

* Watch out for closure charges when comparing costs. It maybe that if you give notice to close the account on a certain date in relation to your last payment that you can avoid the charges.

* Continue to check your credit history online after closing any accounts to ensure that the information registered about the account is correct.

When applying for most categories of loans credit lenders will want to know a considerable amount of information. Such information usually includes full details on your past borrowing, employment status and what you intend to use the loan for.

The majority of the information they require can be obtained from your credit rating, which is essentially a record of your financial past and general credit worthiness. The more trustworthy with lenders’ funds you have been in the past the more positive the impact on your credit rating, and thus all the easier for you to obtain larger loans, with lower interest rates and in most cases with better T&C.

If however, you are less than credit worthy then you will undoubtedly find it more difficult to obtain any new lines of credit – this being one of the major contributing factors that cause people to be untruthful on their loan applications.

Along with this, many people applying for a loan feel the often highly detailed amount of information they are required to supply is too in depth and either feel their privacy is being invaded or are embarrassed to supply certain details.

With Britons owing nearly