Millions of Britons are now hooked on high-cost credit such as payday loans, sometimes paying APRs of 1,000% or more.
Others have been trapped by dodgy backstreet lenders and loan sharks, and are unable to escape.
Complaints about consumer credit rose 40% in 2017/18, which followed an even larger of increase of 89% the year before, according to new figures from the Financial Ombudsman Service.
If you are caught in a debt trap, the icount current account with prepaid Mastercard® could help get you climb of it.
Deep in debt
More than 8 million people in the UK have a problem with debt, according to the Money Advice Service, while more than 3 million households pay more than a quarter of their income to creditors.
Once you fall into this trap, it is difficult to get out of it, especially if your money problems show up on your credit report.
This is a record of all your major financial transactions in the last six years, and will reveal if you have missed any monthly payments, say, for your rent or a mortgage, or utility or mobile phone bill.
This will make it difficult to get borrowings from reputable banks, abandoning you to the loan sharks.
‘No credit check’ credit cards
Just because you have had financial problems does not mean you cannot get a credit card, there is a wide range of credit cards for bad credit.
They can help you repair your credit rating but can also be expensive, charging APRs ranging from 24% to 60%, so always compare credit cards.
The prepaid Mastercard® from icount offers a different way of rebuilding your finances without charging a hefty APR.
You cannot borrow on the card, but can only spend money you have previously loaded, say, from your salary or benefits payment, or by bank transfer or Post Office top-up.
Once you have done that you can use it as a regular Mastercard®, on the high street or online.
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Guaranteed credit card
Some people find that a bad credit rating blocks them from getting a current account, but the icount prepaid Mastercard® gives you an instant sort code and account number, allowing you to set up direct debits and payments.
It also offers 100% guaranteed prepaid card approval, so it is perfect for those struggling to get credit elsewhere.
Build your credit rating
The trick is to keep making every monthly repayment, and keep up with all your other credit commitments. The card’s free CreditBuilder feature will report your success to the credit agencies, so you can soon apply for mainstream finance such as those tempting 0% credit cards.
This makes it one of the best credit cards to build credit.
Clean it up
The card cannot do everything. Because you cannot borrow money on the card, it will not help you pay off existing debts.
If you fall behind with other monthly payments, these will continue to blight your credit report.
Used wisely, it can help you clean up your money problems, without racking up further debts or paying sky-high APRs.
