6 things you really should be scared of

Forget the make-believe horrors of Halloween – vampires, zombies and ghosts have nothing on these sinister six real-life horrors to fear…

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1. Credit card interest rates

There’s nothing more haunting than a credit card balance that just won’t die. Garlic, crucifixes – none of it will do any good, especially not while you’re being charged interest on the balance.

The average interest charged on a credit card is around 18% APR. If you had an outstanding balance of £500 on a card with that rate, and only paid off the minimum £10 each month, it’d take you seven years and two months to clear it – blood curdling.

There is a silver bullet though. If you can’t clear your credit card balance before you start being charged interest, you can slay it with a balance transfer credit card and get up to 34 months to pay down the debt without being charged interest.

That’s what Barclaycard offers via its Platinum Credit Card with Extended Balance Transfer – though there is the necessary evil of a 2.99% fee to pay for the privilege. If this card isn’t for you, there are plenty of others to choose from here.

2. Unauthorised overdraft charges

In Poe’s short story The Tell Tale Heart, a ghoulish heartbeat haunts a murderer’s conscience, reminding him of the mistake he made. Unauthorised overdraft charges are a bit like that.

Sorry, that was a pretty tenuous link, wasn’t it?

If you stray into the red, being charged a fee for doing so is a pretty spiteful reminder of your error. Unauthorised overdrafts can come with many different types of fees. Some charge a monthly fee of up to £35, or higher, while others charge a daily fee of £1 or £2, up to a monthly limit.

If you’re the sort to frequently find yourself in the red, you should switch to a current account with a fee –free overdraft. You’ll find plenty here.

3. Mortgage SVRs

Satanic Viking Rituals? Sentient Vampire Robots? No, something far more terrifying – Standard Variable Rates!

An SVR is a mortgage lender’s default rate which, unless you take action, you’ll revert to when your fixed, tracker or discount deal comes to an end. On an SVR, your mortgage payments could be increased by your lender at any time, and there would be nothing you could do about it.

While the Bank of England Base Rate is low at 0.5% (and has been for more than five years), this might mean relatively low payments – but a rate rise at some point is inevitable, and if you’re already on a tight budget now, things could get even tighter soon.

4. Store cards

More evil than the Cybermen and Cruella DeVille combined, store cards charge interest at up to a bone-chilling 29.9% APR.

The stores offering these cards will tempt you into signing up with a discount on your first purchase, or other such perks. The thing is, if you accrue a balance and start being charged interest at these crazy rates, any initial savings you made will be completely wiped out.

If you need extra time to pay for something you need, a 0% purchase credit card is a much better option.

5. Savings bonus rates expiring

Ephemeral, vanishing and likely to leave you feeling cold – no, not ghosts, but expiring bonus rates on savings accounts.

You see, when it comes to savings rates, things aren’t always what they seem. The current leading cash ISA rate of 1.60% AER (variable), offered by BM Savings, for example, is actually inflated by a bonus of 1.10% which expires after 12 months.

After a year, and unless you move your savings elsewhere, your money will then earn a shambling 0.50% AER. The trick is to keep a keen eye on your account and make sure to move your money if and when you need to.

Our savings channel can help you keep making the most of your money.

6. Tie-ins to expensive contracts (Sky)

Some subscription services, be it mobile phone or pay-TV packages, lock you in for a set length of time, and charge a penalty if you want to leave before it ends.

In terms of mobile phone contracts, the tie-in periods are pretty long too – 24 months is pretty much the industry standard.

Of course there are alternatives. Streaming services such as Netflix and Amazon Prime Instant Video are much cheaper than Sky, offer loads of content and don’t penalise you for cancelling. Read more in my article 5 cheaper alternatives to Sky.

If 24-month phone contracts are too much for you, take a look at rolling SIM-only deals, or pay as you go tariffs over on our mobiles channel.

You’ll notice I couldn’t find a way to shoehorn a Halloween reference into this last point, so, I don’t know… here’s a creepy graveyard to look at…

Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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