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| Irresponsible lending – what to be aware of | |
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As times become harder, and money is harder to come by, and prices are going up – getting access to finance is something that more and more people are thinking of. Many people turn to credit cards when times become tougher, either because they can’t afford what they used to be able to, or to “tidy themselves over” for a short while. As more and more people need money, more and more lenders are entering the market and the potential to get exploited it ever bigger. There are lenders who realise that some people will do pretty much anything to get access to more money, and consequently they see an opportunity to charge them sky high interest rates. Some credit card providers are charging sky high interest rates, and packaging the credit card product up to make it sound much better than it really is. Instead of openly showing the APR, they try to baffle people with minimum repayments, saying that you can pay it back in 6 months for example and so forth. If you’re looking to get a credit card, whether you’re a student or not, the best figure to look at is the APR – we show the APR for various cards on the dedicated student credit card page. The APR is the effective annual interest rate, so basically the rate you’ll be paying it back over a year. There are a lot of other phrases and terms out there, to let you know how much money the loan or credit card is going to cost you. Stick to the APR though and you can’t go wrong. Generally speaking credit cards will have an APR of between 9.99% and around 30%. It depends on your requirements, but these are pretty reasonable and standard interestrates. A card that recently came on the market though had an APR of around 200%, but was advertised very differently. This is an extortionate amount and everyone should be made aware that this is the amount they would be paying back. If there’s any advice we can give – before you get a credit card, student or otherwise – check the APR.. |
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