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If you’re up to your eyeballs in debt, there’s a strong possibility you’re not feeling too good about it.
That might not come as too much of a surprise. But now there’s more evidence than ever showing runaway debts can make you physically ill.
The Money Advice Trust has announced it is witnessing a growing link between the number of people contacting it with money worries and who are also reporting how depressed and stressed they’re feeling about it.
Beccy Boden Wilks, a spokesperson for the Trust, says: "We often speak to clients who feel depressed and who have visited their GP due to the stress and anxiety caused by their debt situation.”
Her comments come hard on the heels of another recent report jointly carried out by The Royal College of Psychiatrists and the health charity, Rethink, which has established a clear correlation between mental illness and high levels of unmanageable debt.
Deal With Your Biggest Money Worries First
It sounds obvious but the Money Advice Trust says those trying to deal with their debt mountains should first target issues where payment must be made to avoid the worst consequences, such as rent or mortgage payments to avoid losing a home or utility bills to prevent disconnection. These are the urgent priorities.
But one these have been tackled, repairing a damaged credit rating is vital for long-term financial health.
As we live in a world that relies on credit, this sounds obvious too. But mending a damaged credit rating is a lot easier said than done.
Rebuild Your Credit Rating With The help of a Credit Card!
With this problem in mind, help might be available from what at first seems a quite unlikely source – a credit card company.
Visa has launched its Capital One Classic credit card designed specially to help those wanting to rebuild their credit rating.
It has a very low credit limit of just £100 to start with but which starts to increase after just four months for customers who demonstrate they can manage their accounts responsibly.
And to help keep on top of repayments, applicants can also register for free email alerts to help stay in control.
Whilst the card is ideal for those wanting to repair their credit rating, is isn’t suitable for those who have been made bankrupt over the previous 12 months or who have never had credit in the UK before. In fact being turned down for this card could damage your credit rating even more!
But if you’re over 18 and on the electoral role, your application is likely to be successful even if you have had CCJs or other financial defaults lodged against you in the past.
All in all, Visa’s Capital One Classic might be just the credit card you’re looking for if you’re determined to get your damaged financial health back on track and fighting fit!
The key points of the card are:
- Low, easy-to-manage credit limit from £100
- A credit limit increase after four months if you manage your account responsibly†
- Register for email alerts to help you stay in control
But before you apply make sure:
- You're over 18
- You have some history of managing your credit even if you have had CCJs or defaults
in the past - You are on the electoral roll
And remember this card isn’t for you if:
- You've never had credit in the
UK before - You have been declared bankrupt in the last 12 months
…Or Is Your Credit Rating so Good You Deserve a Reward?Just as Visa has launched the Classic to help those wanting to rebuild their credit rating, it has also its Capital One “Progress” card for credit card users who are looking to be rewarded for managing their accounts responsibly.
Although the card starts with a high 34.9% interest rate, this decreases by 5% in the fifth month and then by a further 5% every six months to a far more attractive low of 19.9% for those who don’t miss a single monthly payment or exceed their credit limit.
Financial discipline is the key to benefiting from these terms. So if you’re good with money this could be the card for you.
The key points of the Capital One Progress card are:
- Cardholders who do not exceed their credit limit or miss any monthly payments will see the interest rate for purchases and balance transfers will drop by 5% in month five and every six months after that (i.e. months 5, 11 and 17).
- Those missing a payment or exceeding their credit limit they will not be eligible for their next scheduled rate reduction. For example, if a cardholder misses a payment or exceeds their credit limit before their fourth monthly statement they will not receive a rate reduction in month five.
- However if they make all future payments on time and stay within their credit limit they will receive a 5% reduction in their purchase and balance transfer in month 11 and every six months after this. Interest rate reductions are only available until a customer’s interest rate reaches 19.9% or their 22nd monthly statement, whichever is sooner.
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