A key part of everyday life is how you manage your personal finance. How is your attitude the debt and setting spending priorities? The ability to budget and save for major purchases is a learned skill. Your decisions may affect your ability to get a mortgage or rent a flat. Lenders, landlords and housing associations are interested in how you manage you personal finance. As part of credit checks they want to find out if you have access to other financial products. They often ask for info on current accounts, credit cards, personal loans, payday loans, income from savings and investments, etc.
Manage your personal finance
Credit cards can be a great tool for managing your personal finance. There are quite a few reward cards out there offering cashback and rewards every time you spend. Just remember to pay of the balance before the end of the month. Some people prefer to use them over debit cards as they offer greater consumer protection if your spend was over £100. If you run into problems exchanging a faulty product or don’t receive your goods the credit card company will refund you.
Sign up for Money Saving Expert’s credit club. A great new tool for anyone wanting to check their credit scores and compare credit cards and loans. Just sign up and enter your personal details and income and get your score plus affordability rating. The credit card area matches cards to your circumstances and provides you with a percentage for likely acceptance. Some are pre-approved and you can apply through the website.
Personal loans allow you to borrow a set amount over a given time period, usually three to five years, although there are some products which let you extend this period to ten years. They usually have a fixed rate of interest and often the best rates are for loans over £7,500. The main source of lending is high street banks and building societies, although you can find good loan products from credit unions and peer to peer lenders. Watch out for arrangement fees and early exit fees if you want to repay the loan before the end of the agreed term.
Bank and savings accounts
Having a bank account means that you can make and receive payment quickly and safely. Manage your money by checking balances, pay bills, search transactions, manage direct debits and standing orders. You can also use it as proof of payment if you lose your receipt. It’s more useful than a standard bank account as it comes with a debit card rather than a cash card. Click here for the best current accounts, some even pay out more interest than savings accounts.
If you find yourself with a little extra cash at the end of the month, put as much as you can into a savings account. If you have any debts, then you should really be putting anything you have towards that. This is because any money you make on interest you are losing on paying out much higher interest on cards and loans. Savings accounts have had pitiful rates for the past few years but there are some great alternatives. Some current accounts are paying higher rates of interest and also look for regular savings accounts. These accounts pay quite well but only for a set period usually one or two years. For a detailed breakdown of accounts visit our best savings accounts page.