Gill’s Top Tips for Money and Finance
Many students are about to leave University in the next few months. They will then not be classed as students anymore by their banks. Normally students get an interest free overdraft facility, but that can stop as soon as you graduate. Some banks will allow you a free grace period and some gradually introduce charges. Check with your bank so that you can address the issue before it becomes a big debt!
- Students and non students alike should be very wary of ‘consumer’ debt. This is borrowing money to buy stuff that will be out of fashion or out of date pretty quickly. So, you want to buy a new TV for £1k. You buy it on a credit card and only pay the minimum balance off per month. Do you know how long it will take to pay that off? A staggering 37 years! (assuming average interest rates etc). By then the TV will be out of date or broken and you most likely wont have it anymore. So before you purchase think about that. If you buy that TV at the age of 25 you will be 62 (almost at retirement age) before it was fully paid off!
- Compare that to using cash back credit cards where they pay you back a proportion of what you spend. You need to use the credit card as normal but pay it off in full each month and they will pay you up to 5% cash back! That’s a much better way to use a credit card, some don’t give money but give vouchers for everyday spending like petrol etc so it’s worth having. Who doesn’t like a voucher?
- Mortgages and interest rates. Major banks still don’t seem to think that an interest rate rise is likely as they are all cutting their rates again. This month HSBC actually released a fixed rate mortgage deal at 1.69% for FIVE years! That’s crazy money. So it may now be the time to get that mortgage, look at re-mortgages, talk to an independent person or look online for the best deals. If you talk to your bank they will only tell you about THEIR best deals not the best deals from others.
- If you’ve always struggled to get a mortgage because you’re not a standard person with a standard job and a predictable income then don’t worry! There are more providers moving into the market place for you. They tend not to be high street lenders or at rock bottom rates but you can still get deals at about 2% with some. Providers in this market are Kent reliance, Clydesdale Bank. Metro bank and Precise Mortgages.