If you’re looking to borrow a bit of extra money, there are various different types of credit out there. There are basically two different types of credit available: secured and unsecured.

‘Secured’ debts are those that are secured against your home (or, in some cases, other property) – for example, your mortgage. Any money borrowed against your home is classed as a ‘priority debt’, as the consequences of non-repayment could be particularly severe – in the most extreme instance, it could mean losing your home (though this wouldn’t happen immediately).

An ‘unsecured debt’, on the other hand, is any money you borrow on lines of credit such as credit cards and overdrafts, as well as unsecured loans. Although these debts are still important to take care of, the potential consequences of missing payments are generally much less severe – though you could still run up charges, damage your credit rating and even face County Court Judgments (CCJs) in the longer run.

Let’s take a closer look at the most common types of unsecured credit.

Credit/store cards

Credit cards and store cards can be a quick and convenient way of paying for things in shops when you’re out and about. If you have a current account, it’s likely that you’ve been offered a credit card at some point, or at least seen one advertised with your bank, and many shops offer their own store cards to customers.

However, many credit/store cards come with high interest rates, which could mean you end up repaying a lot more overall, due to accruing interest, if you don’t pay off your balance every month.

If you’re struggling to make your credit card repayments, you should get debt advice right away: http://www.debtadvicenow.co.uk/ could help.

Personal loans

Taking out a personal (unsecured) loan could be a suitable idea if you’re looking to make a bigger purchase on credit, such as a new car. Personal loans usually offer some flexibility to the borrower when they’re arranging the loan – as well as how much they want to borrow, they may have quite a lot of choice in terms of how quickly they wish to repay it.

Overdrafts

Many standard bank accounts give customers the option of having an overdraft facility, which could come in handy if they need to borrow a bit of extra cash from month to month.

Interest rates can vary, as can the overdraft limit, and many lenders will charge a fee if you go over the limit – so you should always check the terms and conditions before arranging an overdraft facility.

Everyone needs a little help sometimes. In this hard economy, needing a little extra financial help during the harder months is understandable. If you have a steady job and just need a little extra cash to pay the bills, then consider a payday loan. These services provide cash loans to help you cover expenses until your next payday. Sometimes you just can’t wait those extra two weeks.

However, be careful when choosing a payday loan service. Recent federal laws have really cracked down on the way payday loan operations work, but there are still some shady organizations out there. Be sure to read the terms of your cash loan thoroughly and make sure you understand all the terms in the agreement. In some cases, payday loans use to come with outrageous interest fees with short payback deadlines. The new laws have attempted to make obtaining a short term loan safer for the consumer, but it never hurts to fully understand and comprehend the contract you are agreeing to before signing.

That being said, there are many very reputable payday loan operations out there that can help you get the cash loans you need today in order to pay your bills, buy food, and continue living a stress free life until your next pay check. So stop stressing about your bills. Help is available.

You might consider prepaid credit cards if you don’t have enough credit history to qualify for the typical card. Prepaid cards function similar to a student credit card. It looks just like an actually credit card,  it feature a common card brand name, and it can be used to purchase goods and services at a variety of locations. The only different really is a prepaid student cards is not actually credit at all. The cardholder has deposited money in a pre-determined account, kind of like a savings account. It is more like how a debit card is joined to a bank account. While still in high school, teenagers can use a prepaid card and begin to build their credit history. Once they graduating or turning 18, they can then go ahead and apply for a student credit card to use during college. Prepaid cards can be harder to come by, along with various fees like a monthly convenience fee or even an interest fee.  This can seem a bit unfair considering you are using the card to spend your own money and not money attached to a credit line.

The fact is that now days people see a lot of terms like 0% interest rate or 0% APR on the internet or advertised by the credit card companies on various frontiers. However hard a person may try to get 0% interest credit cards they always seems to be out of reach. Many people have even lost faith that there may be something like this which would mean not having to pay any interest. It would be such a brilliant bonus if someone would actually be able to get their hands on this legendary card.

The truth is that these card do exist and are given out to people as well. The process of laying your hand on one of these babies is not small. You will need to fulfil a lot of requirements and have a great credit score. Before the economic slowdown, these cards were not so rare but now that everything has suffered losses these cards are also given out to only privileged customers. These cards however don’t have the 0% scheme forever; the scheme only is for a short time. This could be from about 6 months to a year depending on what the company can offer you.

Getting a low interest rate on your credit card can mean the difference of high monthly payments. If you maintain a balance on the credit card, it is beneficial to find a credit card that offers a reduced rate. So, how do you go about getting a lower rate on your credit card?

• Maintain your credit rating. If you are able to keep your credit rating up high, or even increase it than the credit card company will be obliged to offer you a lower rate on your credit card. There are often three tiers of credit card interest rates which are used. These rates can be adjusted as the credit rating adjusts.
• Call and ask for a lower rate. When you call and ask for a lower rate on the credit card, there are many times when the credit card company will allow this and you can save from five to ten percent off of the interest rate of your credit card.
• Pay the price. It is possible to pay for a lower interest rate – this is completed by signing up for a lower interest rate by paying an annual fee. If you are willing to pay the fee, it could save you money if you maintain a balance from month to month on the credit card.
• Compare interest rates and find a new credit card. If you are unable to find a lower interest rate with your current company than you can find a lower rate elsewhere with a different company.