The process of buying a house is simple you give some down payment and get a mortgage for the remaining amount. But the trickiest part of the process where most of the people make mistakes is getting the right type of mortgage at the right interest rate with the right features and for the correct tenure. Now these are the factors about mortgages that have the direct impact on the mortgage characteristics and will decide how easy or tough it will be for you to handle the mortgage. By avoiding certain mistakes and following these tips you can make sure that you will get the best deal available for yourself and will be able to manage the mortgage easily.

Not Checking Your Credit Score Early

Consider a situation where you have gathered entire information needed regarding the mortgage and have negotiated the best deal regarding the property that you want to purchase. But your mortgage request gets rejected due to your credit score. Just because of one mistake of not checking the credit score before applying you will lose the property and this rejection will also impact your future requests for the credit as a new inquiry impacts the credit score.

Solution

The solution to avoid this mortgage mistake is to be aware about your credit score before you even think about getting a mortgage. If your score is great than you can plan for other aspects of your mortgage, if your score is not great you still have time to resolve any discrepancies related to your score or even work on the factors to improve your credit score.

Failing to Save for a Sufficient Deposit

A large deposit will not only reduce the amount for which you will be getting the mortgage but will help you to get a better deal for your mortgage in terms of the interest on the amount you would be taking to mortgage. This mortgage mistake is more commonly seen in the first-time home buyers in the United Kingdom.

Solution

Planning in advance is the key here in avoiding this mistake. Try to go for saving at least 10-20% of the value of the property and you will observe much better deals in terms of the interest rate for the mortgage. People usually go for dedicated savings accounts or government schemes to plan for the down payment amount.

Overlooking Additional Costs

This mistake is made majorly by the new home owners in the United Kingdom. People who don’t have complete information about the costs that they would have to take care of in addition to the cost of the property usually end up getting unpleasant surprises when costs like stamp duty, legal fees, survey costs are accounted with property price. This mortgage mistake can increase the mortgage amount as it is obvious that you will not plan for what you will not usually expect to happen. Your deposit will come up short and you would have to increase the mortgage amount and hence you will end up paying more interest for missing details about the total expenses in buying a house.

Solution:

The art of detailed budgeting can avoid this mortgage mistake if done properly including every possible cost related to the property. Just by being updated with the current stamp duty rates and the other fees involved can save a lot of money and avoid a great deal of stress in dealing with these charges later.

Not Getting Pre-Approved for mortgage

It can be really annoying if you are able to find a house that has everything you need but you are not able to get approved for mortgage in time for the deal. Searching for a house without a pre-approved mortgage will leave a lot on the chance of your mortgage request to be approved.

Solution

Solution is really simple follow the basic common sense and start searching for your dream home only when you are pre-approved for the mortgage. As it will not only provide you a clear picture regarding the budget but will also convey your seriousness in buying the property to the selling party or broker.

Choosing the Wrong Mortgage Type

This mortgage mistake happens mainly due to lack of knowledge and awareness about mortgages. If the mortgage which you have selected is not a fit for your financial situation you will definitely face long term implications with respect to interest rates and compatibility with the payment criterion for the mortgage. Most people make this mistake because they have some predefined notion about the mortgage types and without doing complete research, they pick up the wrong mortgage and face financial implications. To make an informed decision one should know about the features of various mortgages types like fixed rate, variable rate, tracker mortgages etc.

Solution

To avoid this mistake a basic knowledge of various mortgage types and features is required. Once you have a basic understanding of mortgages and their features you will be able to analyse which mortgage is best for your financial situation. Taking guidance from the mortgage professional can be really beneficial in making an informed about selecting the best mortgage for you.

Not Reviewing Your Mortgage Offer

Not reading terms and conditions of your agreement carefully can lead you in a lot of trouble when it comes to your mortgage as you might end up agreeing to terms which are desirable and can create financial issues later on while repaying your mortgage.

Solution

The solution to this lethal mortgage mistake is also very simple. Reading the agreement completely and going through each aspect of your mortgage can save you from choosing the unfavourable terms and regretting later on. Coverage and deductibles can be confusing sometimes for the people who are not familiar with the basic mortgage terms. Customers must not assume anything if terms are not clear and must seek help of the mortgage advisor to get clear understanding about every aspect of your mortgage.

Failing to Secure Mortgage Protection Insurance

Taking any kind of credit without securing it with insurance can leave you unprotected in case of any kind of unfortunate event. Insurance is very important in case of mortgage as it will give protection in case of any unfortunate event for your property. People making this mistake are either completely unaware of the risk or are either too confident that nothing can happen to them. Taking mortgage without insurance is equivalent of putting your property for auction in case any unfortunate event.

Solution

Insurance for mortgage provides a cover for your property in case of any unexpected and unfortunate life event. Taking an insurance proves that you handle debt responsibly as it not only prevents your property but also protects your loved from facing repayments in case of an unfortunate event. So, mortgage tip here would be to be responsible and get insurance for your mortgage to protect your dream house in case of any unfortunate event.

Conclusion

It takes a lot of strategic planning and accurate decision making to pick the right mortgage. Keeping these mistakes in mind while deciding for the mortgage will not only enable you to avoid these mortgage pitfalls but will also help you in picking the mortgage that synchronizes completely with your current financial situation and future financial goals. If you are not familiar with technical terms regarding mortgage it is better to find a mortgage advisor. So keep on saving and remember taking care of few mistakes can help you greatly in getting an excellent mortgage for your dream house.

Financial modelling is the most basic skill required throughout the entire spectrum of finance which includes personal finance, investment banking and corporate finance, strategic business planning etc. The entire decision-making process depends on the efficiency of financial model. An inefficient financial model can lead to catastrophic consequences. This blog will be restricted to the personal finance management aspect of financial modelling and will cover financial modelling challenges and financial modelling tips to enable you to make accurate and efficient finance model for your business or personal financial management.

Lack of Clear Objectives

Clarity in the objective is most basic and mandatory requirement to create a robust and efficient financial model. Financial models created with unclear objective will not only be tough to analyze but will also lead to ambiguous and confusing insights which would be hard to work on. Financial models should be built with the clear objective whether it is for valuation, budgeting or decision analysis.

Solution

Defining a clear goal for the financial modelling and thinking it through completely to align with the intended goal will make the process of data collection easy. Without the clarity it becomes tough to collect the data required to seek out the aspect of personal finance in which you are lagging behind as per your financial goal. Setting a clear objective will not only help in creating a financial model that will also bring forward the aspect in which you need to create and monitor your financial model.

Inadequate Understanding of aspects of personal finance

Creating a financial simply means drawing insights and charting them for your personal finances and without the understanding of aspects of personal finance it will be challenging to collect and categorize data to draw insights regarding various aspects of your personal finances. Without the knowledge and understanding of various aspects of personal finance like budgeting, saving and expenses the financial model can lack insights regarding various variables which are critical with respect to personal finance management and this lack of insights can severely impact your financial goals.

Solution:

Having a clear understanding of personal finance aspects will not only help in creating a robust and effective financial model but will also help in finding out variables that impact your personal finance. By avoiding this financial modelling mistake the effectiveness of financial model can be greatly enhanced.

Poor Data Quality

This financial modelling mistake can ruin the entire financial model and can give false insights which can lead to actions on the wrong parameters and can sabotage the complete progress towards the financial. No matter how efficient you are in your analysis you will never be able to draw correct information from data with poor quality.

Solution

Financial modelling tip to avoid this modelling blunder would be to keep the data updated, cross validate the crucial data points and use historical data to validate trends that you have observed in the historic data.

Overcomplicating the Model

Simplicity is an important aspect of any financial model. An efficient financial not only provides the insights but is easy to understand for anyone with little or no knowledge about the financial domain. Financial modelling mistake of over complicating model is more common with the people new to financial modelling. A complicated model will not only be prone to mistakes but is also harder to adjust if there is a change in the variables that impact the financial model.

Solution

A simple and elegant way to tackle this financial modelling mistake is to keep the model as lucid as possible by breaking the complicated sections in to smaller modules which can be analysed and understood easily. Documenting the model thoroughly will also reduce the relational complexities in the financial model.

Inconsistent Assumptions

Varying assumptions can lead to contradicting insights which will make the financial model unreliable. It is very important to keep the assumptions constant in various sections and modules of your financial model to maintain the consistency of your financial model.

Solution

Financial modelling mistake of inconsistent assumptions can be avoided by clearly defining and maintain a legend sheet for all the assumptions used in the financial modelling. As assumptions are dynamic and can change at any time depending on external economic factors regular review and adjustments throughout every module is required to keep the model consistent and reliable. Using a single sheet for assumptions for every module of the model will not only keep the model reliable but will also help in establishing relations between variable during visualization.

Ignoring Scenario and Sensitivity Analysis

This financial modelling mistake can take the financial model off track from the financial modelling objective. If you are including scenario analysis in your model your financial model will become impossible to follow and there is no use for a model which can not prescribe the right course of action to attain the financial objective.

Solution

To avoid this financial modelling mistake, it is crucial to include various scenario analysis which is basically analyzing the impact of change in one or more variable on the output of the model. Sensitivity analysis will provide the information regarding sensitivity of various variable in the financial model. It will provide a clear idea about the variable change in which can alter the entire financial model’s results.

Neglecting External Factors

If you are not considering the impact of external factors which are actually the confounding variables in the financial modelling like economic conditions, tax regulation changes and market trends regarding the variable insurance etc. Excluding these external factors can lead to misleading insights which can ruin your progress towards financial goal.

Solution

Including external factors like macro aspect of economics, regulatory updates and forecast regarding sectors like insurance etc will ensure that your financial model is providing relevant insights which are efficient and relevant. Considering the impact of external factors will increase effectiveness of model as the assumptions are updated regarding the financial model.

Financial modelling requires clarity of objective and effective data analysis approach to extract information which is useful in controlling and managing personal finance. Information about these financial modelling mistakes will not only help you in avoiding these mistakes but will also improve the decision-making process of any individual who wants to manage his personal finance and achieve financial goals.

Budgeting is the most crucial part of personal finance planning which helps in optimizing the expenses and ensures financial stability by maintaining funds for savings and emergencies. However, budgeting mistakes can ruin the entire financial planning and can even prove detrimental for your financial goals. Hence avoiding budgeting mistakes can not only ensure that you are on the right rack to achieve your financial goals but ensures financial stability as well. Let us discuss the most commonly made budgeting mistakes and solutions for avoiding these budgeting mistakes.

1. Not Tracking Your Spending

This budgeting mistake is one of the main reasons which leads most people towards debt and financial trouble. If you cannot track where the money is going you won’t be able to control your expenses which will eventually lead to reduced savings and will decrease your financial stability.

Solution:

Maintaining the data for expenses is the simple and effective solution for this mistake. Tools like Microsoft excel, budgeting apps or even the old school way of maintain a notebook can help you in tracking your expenses. This habit of tracking expenses will not only stop you from making this budgeting mistake but will provide the information regarding the expenses which you can cut back in order to align your spending amount with your budget.

2. Setting Unrealistic Goals

Setting unrealistic goals is a budgeting mistake that not only restricts even the necessary expenses sometimes but also leads to frustration leading to failure in sticking to your budget. Budgeting should be considered as a habit or a way of life not a punishment which you have to put yourself into.

Solution:

Setting achievable and realistic goals will not only avoid this budgeting mistake but will also give the confidence and motivation to achieve your goals in future regarding and expenses. It works for any schedule whether it is regarding budgeting or any personal goal that you have decided to achieve. So, the key here is to start small and gradually adjust the goals as you move further.

3. Ignoring Irregular Expenses

Your irregular expenses like car repairs, home improvement emergencies, medical bills or annual subscriptions can throw your budget offtrack if you have ignored by considering them exceptions. These expenses will absorb your savings or emergency funds like sponge absorbs water. It is one of the most common budgeting mistakes that a lot of people make and suffer the consequences like depleted emergency fund and savings.

Solution:

It is hard to plan exactly for the uncertain events like car repair, home repairs, medical bills, sudden change in insurance premiums etc. But keeping some percentage of your income aside for these unexpected expenses in a separate savings account can not only provide a cushion for your savings and emergency funds but will also help you in monitoring these expenses for a given time period so that you will be able to tackle these situations better in future.

4. Not Adjusting Your Budget

Anything which does not evolve will either lose the importance and will eventually perish to exist, and this statement goes exactly for your budget. If you are not periodically reviewing your budget and not monitoring how your current budgeting method is progressing towards your financial goal. Your budgeting is losing the effectiveness to make you reach your financial goals.

Solution:

Creating a schedule to review your budget monthly and adjusting the budget as per your current financial situation is the solution to avoid this budgeting mistake. This might not seem like a fatal mistake but this mistake really creeps up with time and can impact your budget severely after a while.

5. Underestimating Small Expenses

This budgeting mistake often goes unseen as it is tough to account for every little detail regarding your insignificant monthly expenses. For an example having a cup of coffee outdoor, your weekend dining rituals, smoking expenses, entertainment subscriptions etc. These are the expenses which must be accounted to avoid increase in your monthly expenditure and safeguard your savings monthly.

Solution:

Including a new all of a sudden is tough for everyone but continuous effort made in direction to mitigate these expenses can improve your budgeting drastically. The solution to avoid this budgeting mistake is to keep track of all expenses no matter how small they are and include them in your budget under personal expenditure. The trick here is you can only control what can track.

6. Neglecting to Save for Emergencies

A big percentage of people suffering from high interest rate debt are the people who overlook the importance of saving for emergencies. The only resort left with them is turn to their credit cards in the hour of need which only raises the probability of increasing debt and that too at higher interest rates.

Solution:

Emergencies can happen anytime and if you are not prepared for them be prepared to suffer for months or years in the near future as these expenses can throw you off track from your financial goal and can throw your finances off the cliff and in worst case scenario you may even end in debt. The solution to avoid this budgeting mistake would be to plan to save a minimum of three months of living expenses in advance to tackle emergency expenses.

7. Not Prioritizing Debt Repayment

Stalling repayments for long time will only lead the amount you owe to the creditor to increase substantially especially if it is a credit card. This budgeting mistake happens due to lack of awareness as people mostly think that their debt is decreasing each month even if they are just paying the minimum payment due. However, their debt is increasing as the minimum payment due is only 1.5 to 2 percent of the debt and the rolling over balance is accruing interest each month.

Solution:

This budgeting mistake can be avoided by prioritizing the debt repayment by allocating a fixed amount towards debt which is greater than minimum payment. Repayment strategies like snowball repayment method or avalanche method can be used to save money on interest while repaying the debt.

8. Relying on Credit for Everyday Purchases

Credit cards are an amazing tool to use debt but if used inefficiently they can be a double edge sword which can tear your budget apart in no time. One of the biggest budgeting mistakes that people make while using the credit cards is actually using their credit cards for everyday purchases. Tis can not only lead to accumulate balances at a higher rate if not paid each month in full but can also have a negative effect on the credit score due to credit card balance increasing the credit utilization ratio.

Solution:

The solution is simple for this budgeting mistake which is to use your money not credit to pay for everyday needs. Credit cards should be used only if you are certain that you will pay before the due date and in full.

9. Not Accounting for Inflation

Inflation the hidden killer for your savings that has to be included in any budget as the expenses are impacted directly by the inflation. It is the most common budgeting mistake done by people who are not aware about the inflation factor. A separate slack in saving should be provided to compensate inflation factor in the budget.

Solution:

To root out this budgeting mistake periodic reviews and adjustments is the perfect solution. As efficient monitoring and adjustments will ensure that savings and spending are normalized and will remain unaffected by the inflation rate.

Efficient planning and execution in budgeting can be considered as an anchor of your ship in your journey towards financial freedom. Understanding what can go wrong will definitely help in proactive planning and efficient execution of your budget. It takes commitment and dedication in reviewing the budget and making the changes. But if you are putting in the effort you will notice that this effort is definitely helpful in achieving your financial goals.

There are basically two ways to live financially, first is saving your income and investing it over time to ensure your financial freedom which is not bad at all. Now the second way to live financially is to use credit as money and use the debt to get assets and leverage you way towards your financial freedom. The most widely used credit instrument today is none other than the lifeline of youth and safety net for the elderly and that is credit cards. If used properly credit cards can benefit in many ways which includes an amazing credit score, rewards and benefits, access to better deals for mortgages and personal loans. However improper use of credit cards can land you in issues like debt with higher interest rates, low credit scores, penalties, financial stress etc.

Knowledge and awareness about credit card mistakes to avoid can help the customers in informative decision making about their expenses and help them in improving their credit scores. Hence this information about major credit card mistakes can not only save customers from making terrible financial decisions but will also help in utilizing the complete potential of credit available to them. Let us do a qualitative analysis to find solutions for these major credit card mistakes that customers must avoid.

1. Not Understanding Your Terms and Conditions

Out of all major credit card mistakes this mistake is the most frequent and a majority of customers suffers just because of ignorance and laziness to not read the terms and the conditions of their credit cards. People who do not go through the terms and conditions properly are the ones who gets unpleasant surprises down the road with their credit cards.

Solution:

Using your credit card means taking credit from the credit card provider. It is simple common sense to go through the terms and conditions before taking debt from anyone. You must have the complete information about interest rate, credit card annual membership fee, rewards and repayment terms. Just by being proactive and aware this major credit card mistake can be easily avoided.

2. Only Making Minimum Payments

People think that making a minimum due each month will reduce the credit card balance and will save them from accruing interest each month, but minimum amount due us required just to prevent the account from going in the past due status. If we look closely, we can easily find out that the minimum due is roughly 1.5 percent of the balance plus any past dues and interest charges. By paying the minimum amount due you will make the payment for 1.5 percent of the amount used but your remaining balance will start accruing interest on the average rolling balance daily. It is one of the major credit card mistakes that people do just because of the incomplete understanding of the minimum balance and mechanism of accrual of interest each month.

Solution:

This reason behind this mistake is basically lack of knowledge of how the minimum payments work in favour of the banks and not for the customers. Making payments in full every month before the due date should be the idea approach for repaying the balance. However, if you do not have the funds available for the complete payment of balance before the due date try make as much as you can above the minimum payment due. This is how you can avoid making this major mistake with credit cards.

3. Missing Payments

Missing your payments means that you are not even able to make the minimum payment due on time. It reduces your credit score and impacts your credibility as a customer for credit. In addition to lowering your credit score it will impact the interest rates on your purchases and you will have past dues which will accrue interest as well. This credit card mistake to avoid is actually a fatal one considering the impacts it will have on your account.

Solution:

This problem can be resolved with the help of automated reminders. You can simply add the due date on the google calendar app so that you are reminded on your smart phone for the upcoming payment in advance. It would be even better to get the automatic payment feature activated for the minimum payments to make sure that you do not miss on the payments.

4. Out Your Credit Limit

This mistake is more likely a discipline issue or mishandling the credit limit assigned to you. More than 80 percent customers do not know the impact of maxing out their credit limit. Utilizing the entire credit limit or the amount close to the maximum limit cam impact credit score and will make it tough to get credit in future. This major credit card mistake is directly linked to the credit utilization ratio which is a critical factor in determining the credit score.

Solution:

This credit card mistake can be avoided by actually not being a shopaholic and exercising discipline on your expenditure. Keeping a low credit utilization ratio will not only help in maintaining a good credit score but will also help is getting benefits and offers from the credit card provider. The advised value is 30 percent of your credit utilization ratio, however keeping the utilization close to 10 percent can really help in getting credit benefits from the credit card provider.

5. Using Credit for Everyday Expenses

Using credit card for groceries can be the best utilization of the credit card as it also gives the reward points for most of the credit cards. But using the credit card as the only source for daily expenses can land you in trouble because the money you are spending accrues interest on daily basis for the number of days it will be rolling over after the due date. Its better to shop once or twice in a month for groceries to keep the spending in check. This credit card mistake to avoid can really slip through if not monitored properly.

Solution:

The golden rule to financial management is to use credit to create assets and use income to cover up the expenses. However, if you use credit card for groceries and shop for once or twice in a month and pay the balance before the due date you will not only be increasing the credit score but will also end up gaining reward points which can be redeemed later. This credit card mistake can be avoided by creating a budget and paying the balance before due date every month.

6. Taking Out Cash Advances

Using your credit card for cash advances typically comes with high fees and immediate interest charges.

This is the most critical credit card mistake to avoid as the cash advances are usually in the maximum interest rate slab for almost every bank. The interest is charged right from the moment you take out cash and cash advances also have a cash advance fees which can be up to 10 percent of the transaction amount. So, it would be wise to use the credit card for your purchases only as taking cash out of your card is an expensive deal for you.

Solution:

You would be just surprised to know how much it can cost you if you do not have the information about taking cash advance because the charges under cash advance are almost equally charged as your penalty priced transactions. The transaction fee does the job of salt on the injury as transaction fees can be up to 10 percent of the amount transacted. Personal loans are always a better alternative in emergencies as compared to the cash advance. However, it is always beneficial to make a budget and save some money for emergencies. This major credit card mistake can be avoided by effective budgeting and definitely with the common sense to have a backup for emergencies.

Credit cards are just like your best friend to help you with financial issues if used properly, however if not used properly they can be your worst enemy as they can put you in substantial debt with high interest rates and can impact your credit score badly. By having the awareness and knowledge about the major credit card mistakes to avoid you can actually use the credit cards to their full potential and unlock your financial potential by improving your credit score.

Credit cards are the lifeline for most people and they provide variety of benefits for example you can get rewards points for shopping which you can later redeem, credit cards do provide cashback, miles benefits if you use them for air travel and discounts for using the credit card for fuel at gas stations. However, if do not use credit cards carefully because they can lead you into high interest debt and financial trouble as it can throw your personal finance off balance. Misusing the credit cards can impact your credit score severely.

Understanding Credit Cards in the UK

There are various credit cards which are available in the United Kingdom and every card provides a different feature and benefits. It is very important to go through the benefits of the card like annual membership fee, interest rates, introductory offers, benefits on grocer shopping and travel rewards.

Standard Credit Cards: As the name suggests these are cards with standard services and no rewards points or cashback schemes but generally these are the cards which come with no annual membership fee. So, these are free to use and most banks provide introductory interest rate offers on purchases on these cards.
Rewards Credit Cards: These are the credit cards which comes with the feature of reward points which means you will be get reward point for every pound you will spend using your credit card. Some banks provide the card with double cash reward schemes which means that you will get one reward point when you will spend the money and one reward point when you will make the payment for the balance in your card. The reward points that you have earned can be redeemed later either through a check, transfer to your checking account or gift cards for various stores.
Cashback Credit Cards: As the name suggests these are the cards which provides some percentage of your spending back to your credit card available balance which we call cashback. Cashback credit cards are best suited for the people who use the credit cards for various needs like shopping, groceries, travel, fuel, etc. There are various offers provided by the banks at various seasons to get extra points or increased cashback. These cards are perfect to save money in terms of cashback.
Balance Transfer Credit Cards: These are credit which comes with the feature of balance transfer which is in simple words is the feature to consolidate or transfer your debt from other cards to the present card usually at a zero percent interest rate for a predefined period by the banks. These cards provide an excellent facility to consolidate the debt at low interest which results in substantial savings in terms of the interest that would have paid for the balances in the other cards.
Travel Credit Cards: These are the cards which give you points on air travel, hotel reservations etc. These are best suited for the people who travel frequently. The benefits may vary with different cards. Banks also provide offers give some extra mile points on covering some specific number of miles.
Credit Builder Cards: These are similar to secured cards provided in the United States, the collateral amount submitted while getting the card is used as a credit limit and the customer can deposit the money in the account in case the limit is utilized. These are basically used to improve credit score so that consumers will eligible for the credit card. Banks review the eligibility of the user usually after one year to decide to upgrade to a credit card.

Best Practices for Using Credit Cards in the UK

Choose the Right Card: If you select the right card as per your needs more than half of your work is done for an example if you need card for everyday shopping then the rewards is the best card for you, if you travel a lot then the travel card is best for you and if you use your card rarely then the standard card is the best choice for you.
Assess Your Needs: Utilization of credit card should be sensible; you should only use your card either strictly for your needs or in case of emergencies. Unnecessary use of the credit card must be avoided as it can put you in the zone higher and can create issues with your credit score.
Compare Offers: Most people are not aware about the benefits of comparing features like interest rates, introductory offers, and rewards schemes, it is just like getting a pair of jeans for yourself you will pick the one which suits your needs and is beneficial in terms of price. In context of the United Kingdom, you can visit websites like Money supermarket, compare the market, or Uswitch to find the best deals regarding credit cards.
Maximize Rewards and Cashback: You can take the advantage of the reward points by charging the regular expenses like groceries, fuel and bills to credit and accumulate the points to redeem them later. You should lookout for the special promotions for higher rewards or cashback which banks might provide for a limited time every year.
Manage Your Spending: It is really common sense you only bite what you can chew, similarly in case of credit cards you should only charge what you can easily afford to pay because it would be you who would be paying the interest on your balance. Tracking your spendings can really help in controlling and even stopping you from going over the limit on your and almost every card provider has an app for credit card customer where you can easily keep track of your expenses.
Build and Maintain Good Credit: Building a good credit score is like building trust with the creditors that you can responsibly manage your debt. The best ways to manage would be to keep the credit card balances low and make at least minimum payment due each month before due date to avoid getting past due charges which can give negative remarks on your credit report. Keeping your credit utilization below 30 per cent is recommended. Checking your credit report regularly is a good habit which ensures that credit history is reported accurately and there are no errors that can impact your credit score.
Use Balance Transfer Offers Wisely: Consolidating credit form a former credit into a new credit card by using the balance transfer offers can really save substantial amount of money. The best strategy would be to transfer the balances from your old cards to the new card and take advantage of the introductory balance transfer offers to save interest. Try to pay the balance transfer amount within the introductory period as the once the period is over this balance transfer amount will be charged at the regular interest rate for purchases.
Travel Smart with Credit Cards: You can avoid foreign transaction fees which is the fee charged when you are charging your card at a merchant in foreign currency. Travel card cards also provide very reasonable rates for currency exchange. Not only in terms of the fees and the exchange rates every time you travel internationally you should notify the card provider to make sure that your card is working without any interruption during your travel.
Leverage Consumer Protection: United Kingdom has amazing consumer protection laws which safeguards the consumers from fraudulent activities. Section 75 of consumer credit act ensures the protection for customer’s money if the goods or services are not up to the mark or not delivered under the range of 100 pounds to 30,000 pounds. For the charges below 100 pounds customers can request a charge back from the card provider if something is wrong about the transaction.
Stay Safe Online: We all do majority of our transactions by using websites and applications which is a great advantage of technology. However, with the advancement in technology chances of frauds have risen as well. Consumers must be aware about online security and should only use secured websites for transaction using credit cards, a common tip here would be to look for HTTPS in the URL of website on which you are making the transaction.
Tips for Choosing the Best Credit Card: Tips for choosing a credit card would be really simple you should get the cards with lower interest rate if you are not going to pay the balances in full every month. Make sure that there is no annual fee for the card and if there is a fee make sure that the benefits are worth paying an annual fee for the card. Check for introductory offers on purchases or balance transfers so that you can consolidate debt or create an asset at zero per cent interest. At last, you must check for the rewards and benefits associated with the card like travel insurance, purchase protection, extended warranties and cashback offers.

Not Checking Your Credit Score Early

Solution

Failing to Save for a Sufficient Deposit

Solution

Overlooking Additional Costs

Solution:

Not Getting Pre-Approved for mortgage

Solution

Choosing the Wrong Mortgage Type

Solution

Not Reviewing Your Mortgage Offer

Solution

Failing to Secure Mortgage Protection Insurance

Solution

Conclusion

Lack of Clear Objectives

Solution

Inadequate Understanding of aspects of personal finance

Solution:

Poor Data Quality

Solution

Overcomplicating the Model

Solution

Inconsistent Assumptions

Solution

Ignoring Scenario and Sensitivity Analysis

Solution

Neglecting External Factors

Solution

1. Not Understanding Your Terms and Conditions

2. Only Making Minimum Payments

3. Missing Payments

4. Out Your Credit Limit

5. Using Credit for Everyday Expenses

6. Taking Out Cash Advances

Understanding Credit Cards in the UK

Best Practices for Using Credit Cards in the UK

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