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James Jones, head of consumer affairs at Experian, shares his top tips on how to cut costs and feel more in control of your finances this winter and beyond.
STEP 1: Switch and save – searches for balance transfer cards are up 39%
“If you have existing credit card debt and are looking to pay off money faster, switching to a balance transfer card could be a good option. These cards could help you reduce the interest that you pay, giving you the opportunity to put the savings towards repaying your debt more quickly.
“Our data suggests more people in October this year were thinking about applying for a balance transfer card, which shows that many are planning ahead and trying to get their 2023 finances in order earlier than they might normally.”
STEP 2: If you have multiple repayments to make – consider consolidating your debts
“For people looking at ways to better manage their existing borrowing because they are facing multiple credit repayments, a debt consolidation loan could help to simplify the process by combining all money owed into one place – and could cut your monthly expenditure. It essentially involves taking out another loan so that you are able to pay off all your current credit commitments, at a more affordable rate because it may reduce the interest you pay.”
STEP 3: If you need to use credit, consider using a rewards or cashback card to get something in return
“As costs continue to rise people may find themselves looking for credit options with better benefits. Our data suggests people are being savvier with their use of products like credit cards – searching for those that offer rewards or cashback in return for their spending.
“Used responsibly and carefully, these credit cards can provide you with a range of benefits. But it’s always important to first think about your repayment plans. So whether you’re making more frequent purchases like food shopping on your card or larger spends such as holidays to take advantage of points programs, make sure you will be able to repay your spending, so you are not storing up trouble for the future. Using credit to pay for everyday essentials is usually unwise, unless you are in a position to clear the balance at the end of the month.
“Before making any application for a credit card it’s important to first check your eligibility for the product of your choice. You can do this on comparison sites including Experian, where soft searches are recorded that won’t affect your credit score. If you find yourself in a position in which you’re unlikely to be approved, then you can take steps to improve your credit score or review other options.”
STEP 4: Check and engage with your credit score to protect yourself from fraud
“Many financial service providers have issued fraud and scam warnings in recent months, particularly aimed at the busy Christmas season. People are being encouraged to be increasingly vigilant, as criminals seek to take advantage of people’s circumstances during the festive shopping period and with rising prices continuing to bite. One of the most common cases of fraud is ID fraud, in which a criminal uses a person’s details to apply for credit in their name.
“If someone has stolen your identity and applied for a loan or credit card, the first warning sign is your credit score changing, so check it regularly – it’s free and easy to do so. You can also review your credit report free of charge, and if you notice any issues, it’s important to let your financial provider know so that these can be corrected. While it’s being investigated the credit reference agencies can note this on your credit report and can also advise on measures to help secure your credit report and your identity. You can request a free copy of your statutory credit report by visiting www.experian.co.uk/stat.”
STEP 5: Seek help if you need it – financial providers and debt charities could offer support
“Finding yourself with unmanageable debts or being unable to pay all of your monthly bills is stressful, and it can be isolating. Every organisation out there knows the current economic landscape, and they are all determined to do what they can to help customers. In the first instance, speak to relevant creditors or service providers to see if they can offer assistance. You may also find that debt charities such as StepChange and National Debtline can offer guidance or support with appropriate debt-management solutions.”
Notes to editors:
1 Experian compared searches for BT cards on its marketplace and found that searches had increased by 39% in October 2022, when comparing the same month to October 2021
2 Experian analysed the most searched for loan products on its marketplace and found that searches for debt consolidation loans made up 36% of the total searches in October 2022. These searches accounted for the majority on the site
3 Experian compared searches for rewards and cash backs cards on its marketplace and found that searches had increased by 85% when comparing October’s activity with October 2021
4 Experian analysis based on National Hunter Fraud Prevention Service data
5 UK Finance’s Annual Fraud Report 2022
6 UK Finance, learnings from the half-year fraud report
7 StepChange debt charity report called ‘Mixed Messages’
Eliza Odire-Boadi, Consumer PR Manager, Experian UK&I
Tel: 07816192572 / Email: firstname.lastname@example.org
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