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Manage your credit

Manage your credit

Credit is a financial tool that offers convenience and flexibility. But, like any tool, it needs to be looked after and managed responsibly. Control your credit, don’t let it control you.

How do I manage credit responsibly?

It sounds obvious but a good first step to managing credit responsibly is to manage your money responsibly. For instance, create a budget to manage how much you spend – and stick to it. You can visit the Financial Conduct Authority Money Advice Service website for some useful tools to help with budgeting.

  • Be realistic with your spending
  • Keep track of where you spend your money – keeping receipts will help you remember
  • Save up over time for larger purchases rather than buying them using credit
  • Keep credit card balances as low as possible – even better, pay them off each month

 

How can I borrow responsibly?

Borrowing responsibly means paying bills on time and not taking on more debt than you can realistically handle, so bear in mind the following:

  • Plan purchases to fit into your monthly budget and avoid making impulse buys. Bargains rarely seem like bargains when you add in monthly interest charges
  • It is often unwise to finance purchases longer than the lifespan of the products you’re buying. Financing a car over a longer period is understandable, but it is sensible for everyday purchases to be financed over as short a period as possible
  • Keep well below your credit limit. Not only will you save money on monthly interest charges, you’ll also be keeping credit for when you need it most

 

How do I know if my borrowing is getting out of hand?

Here are some warning signs. If any apply to you it may be time to rethink your financial situation or seek independent help with your debts:

  • You’re constantly paying bills late and only making the minimum payment each month
  • You’re surprised by how many purchases there are on your monthly statement
  • You’ve reached or exceeded the credit limit on one or more of your accounts
  • You need to work overtime or take on a second job just to meet your monthly payments
  • You’re struggling to make repayments or having to juggle finances to meet credit payments

Please note: The contents of these pages are not intended to be taken as financial advice or recommendation made by MBNA. You should seek independent financial advice if unsure about your financial needs.

 

Other services

Money Advice Services
moneyadviceservice.org.uk/yourmoney/
Guide to credit cards
moneyexpert.com