Use credit cards wisely, says expert

Brits who take on a new credit card in order to help them build a credit rating may wish to follow the advice of one expert and consider their use of the product carefully.

Annie Shaw, editor of financial advisory website CashQuestions.com, warned problems can arise if they are used incorrectly.

She specified the best purpose for credit cards is as an aid to budgeting, or as a consumer protection tool.

Ms Shaw noted this solution can be an expensive method of borrowing if people spend beyond their means.

"It becomes very worrying if people are using it because they actually don't have enough money and they are then not paying off that bill every month," the expert remarked.

A study recently published by the Post Office - entitled the Consumer Credit Report - found a third of card holders may end up using plastic to cover everyday purchases, such as food and utility bills.

Posted by Tom Burroughs