Beating the Credit Crunch

Making both ends meet is no easy job for ordinary mortals even during the best of times. Now with a wobbly stock market and job market, the problem has grown to gigantic proportions.

The first rule to beat the credit crunch is living within ones means. Everything from clothes to cars to castles are available on credit today, but think realistically and decide how much of these things one actually needs. Go in for a loan only as far as it is a loan that is bound to be advantageous in the long run like a money advance for college education, or a house. Never buy anything on credit just for fancy or glamour.

A roof over the heads is what most people need. But before opting for a mortgage there are many things to be looked into. There are even a whole lot of initial investments to be considered. While buying a property a buyer can save money by relying on the lenders evaluation to ensure that the property is loan-worthy. On the other hand, he can have his own survey done, pinpointing the weaknesses, thereby saving money on future repairs.

There are Repayment Mortgages and Interest Only Mortgages. In the former, monthly payments include both the interest and the capital. In the latter, one pays only the interest on the mortgage and pays the capital only at the end of the term when he finishes paying the interest. This is not a bad option where the buyer is careful enough to separately deposit that capital amount every month. In case the full capital amount accumulates fast he can also make a real profit by paying it off the loan early.

Whichever the chosen option, aim at paying off the mortgage fast. It will save you at least hundreds of pounds. There are several refinancing options as well. Different companies have different options and one should go through the offer thoroughly and see the small print as well to keep off the traps. Some companies refinance with lower monthly payment rates, other may lower the total number of years, and increase the monthly amount.

Credit cards are considered to be the next in line. Sure, they are convenient, but what about the interest involved? And how much does cash weigh, especially that which is required for ordinary shopping? And with ATMs at every corner, has money ever been more easily accessible? As much as possible, pay cash and never be in debt to anyone, least of all to credit card companies. Those who already have a high credit card balance should repay it fast from available funds without allowing more interest to accrue. Or try to move the balance to another card with lower interest rate or take a bank loan to pay off the debt.

If use a credit card you should, try to take some advantage from their incentives like airline miles or deposits or cash back policy. And try never to use credit cards for cash advances even if you use it for the supermarket. Interest rates for cash advances are very much high. And always try to pay more than the minimum balance to the company every month.

Cut down on eating out. If eat out you must, search for good deals. There are sites that have some money saver offers for those for who cant resist eating out.

Save on power. Use lights only where it is necessary. While using the air conditioner, ensure that the house is well insulated and there is no cold draft leaking in. Pinch pennies to beat the credit crunch.

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