Making ends meet is a challenge

MANY of us are still counting the cost of a summer of celebrations – but with Christmas on the horizon there's no time to lose in getting a grip on our finances.

The free and independent Money Advice Service, set up last year, has launched a TV, print and online campaign this autumn to try to help.

Its research shows that less than half of people in Leicester can recall ever receiving guidance on managing their money.

The national figures are similar, with the least well-off also shown to be the group least likely to seek help.

The television adverts from the service, which was set up by the Government to try to close the “advice gap” and make us more financially capable, focus on everyday conversations in real-life situations when money matters.

Money Advice Service chairman Gerard Lemos said “This campaign is designed to shake people out of their money slumber and prompt them to manage their finances well.”

Many people have been finding it hard to make ends meet since the recession began. Living costs continue to grow: consumer research shows the average monthly household grocery spend was £273 in August, compared to £246 at the same time last year.

Some turn to credit cards or even payday loans to help make ends meet. But juggling debts can provde a struggle. The Consumer Credit Counselling Service said it advised more than 1,500 Leicester residents last year who had debt problems.

CCCS has a helpline providing free and impartial advice to people with debt problems on 0800 1381 111 from 8am to 8pm on weekdays.

Its website also lists a number of places in Leicester and Leicestershire where you can get free face-to-face advice.

The National Debtline offers free, confidential and independent advice over the phone for people in England, Scotland and Wales. It is on 0808 8084 000.

There is nothing wrong with using a credit card to help you through an expensive patch, as long as you manage the repayments properly.

If you've run up a balance that's attracting sky-high interest charges, you need to tackle your debts sooner rather than later. There's no need for you to pay any interest at all on your credit card debts if you move what you owe on to a credit card offering a 0% introductory rate on balance transfers.

Kevin Mountford, head of banking at MoneySupermaket said: "Those who used a credit card to pay for the extra expenditure this summer need to make sure they have the right plastic, otherwise they could be paying over the odds.

"Transferring any existing debts from summer spending on to a balance transfer card such as the Barclaycard Platinum Credit Card with Extended Balance Transfer offering 22 months interest free can help spread the cost over that promotional period. Make sure you repay at least the minimum payment on time each month, though, or you could lose the 0% deal."

According to research by Moneysupermarket, switching a £3,000 balance from a card with a market average standard rate of 17.31% to the Barclaycard deal would save you £696 in interest over the 22-month term of the deal. This figure factors in the card's 2.9% balance transfer fee.

Halifax's Balance Transfer Credit Card also offers 0% on balance transfers for 22 months, but has a higher 3.5% balance transfer fee.

If a lower transfer fee is a priority, then it may be worth considering Barclaycard's Platinum Credit Card with Balance Transfer, as this offers shorter 21-month 0% introductory period, but has a 2.6% transfer fee. After the introductory periods on these cards finish, all three of them have a typical representative APR of 17.9% (variable).

Alternatively MBNA's Platinum Credit Card offers 0% on balance transfers for 20 months, and has a 2.85% handling fee. After this, the card has a representative APR of 18.9% variable on any remaining balance transfer.

A good rule of thumb is never to spend using a balance transfer card, as you will usually be charged relatively steep rates of interest on all new purchases if you don't clear your purchases balance each month.

If you don't want separate cards for spending and balance transfers, your best bet is to go for a credit card which offers a 0% introductory rate on both.

Halifax's All in One card, for example, has a 0% introductory period for 15 months on both purchases and balance transfers.

There is a 3% handling fee to pay on balance transfers and, once the introductory period is up, the card has a representative variable APR of 17.9% on both purchases and balance transfers. This makes it important to do everything you can to pay off all spending and existing debts before this rate kicks in.

Other competitive cards for balance transfers and purchases include Barclaycard's Platinum with Purchase card, which offers 0% on both for 14 months, subject to a 2.9% balance transfer handling fee. After the introductory period ends, the card has a representative APR of 18.9% (variable) so once again you should try to clear your balance and pay off any new spending within the first 14 months.

The Tesco Clubcard Credit Card for purchases is also worth a look. It has a shorter nine month 0% introductory period for balance transfers, and a 16-month 0% period for purchases. If you are moving a balance over from another credit card, you will be charged a 2.9% transfer fee.

Once the 0% offers end, you'll be charged an APR of 16.9% on purchases and 18.2% on balance transfers. This card also doubles as a Tesco Clubcard so can be used to collect standard points on shopping in Tesco and on other spending as well.

Whichever card you are considering moving your existing credit card balance to, always make sure you pay off what you owe during the introductory period - otherwise interest will quickly mount up. One way to be certain you'll do this is by setting up a direct debit every month, so that payments will be made automatically.

Please note: Any rates or deals mentioned in this article were available at the time of writing.