h credit cards is that they are expensive to run if the full amount is not paid off. Interest rates of around 15% APR are not uncommon; compared to a loan, this is quite high. So why don’t we cut up our cards and take out lots of little loans? Standard loans do not beneFor decades, credit cards have been supplying people with a degree of flexibility and convenience that life makes necessary. If you’re not familiar with the principle, here it is. The credit card company sets up an account and issues the customer with a card and a “credit limit”, which is the maximum amount the borrower can owe on that account. The customer will then use the credit card to make purchases, and the amount paid goes onto the account. Further purchases add to this account. Once a month, the cardholder gets a statement which details the purchases made, the interest charged and any repayments made. There is also a minimum payment amount (a percentage of the outstanding balance); failing to pay this minimum in full, or paying after the cut-off date, will result in charges that will be shown on the following month’s statement. Borrowers can choose to pay off the minimum or any amount up to the full balance. Because interest is usually charged after 30 days, some people pay off the full balance monthly and in effect have free credit.

The downside with credit cards is that they are expensive to run if the full amount is not paid off. Interest rates of around 15% APR are not uncommon; compared to a loan, this is quite high. So why don’t we cut up our cards and take out lots of little loans? Standard loans do not bene

it limit”, which is the maximum amount the borrower can owe on that account. The customer will then use the credit card to make purchases, and the amount paid goes onto the account. Further purchases add to this account. Once a month, the cardholder gets a statement which details the purchases made, the interest charged and any repayments made. There is also a minimum payment amount (a percentage of the outstanding balance); failing to pay this minimum in full, or paying after the cut-off date, will result in charges that will be shown on the following month’s statement. Borrowers can choose to pay off the minimum or any amount up to the full balance. Because interest is usually charged after 30 days, some people pay off the full balance monthly and in effect have free credit.

The downside with credit cards is that they are expensive to run if the full amount is not paid off. Interest rates of around 15% APR are not uncommon; compared to a loan, this is quite high. So why don’t we cut up our cards and take out lots of little loans? Standard loans do not bene

ch details the purchases made, the interest charged and any repayments made. There is also a minimum payment amount (a percentage of the outstanding balance); failing to pay this minimum in full, or paying after the cut-off date, will result in charges that will be shown on the following month’s statement. Borrowers can choose to pay off the minimum or any amount up to the full balance. Because interest is usually charged after 30 days, some people pay off the full balance monthly and in effect have free credit.

The downside with credit cards is that they are expensive to run if the full amount is not paid off. Interest rates of around 15% APR are not uncommon; compared to a loan, this is quite high. So why don’t we cut up our cards and take out lots of little loans? Standard loans do not bene

n on the following month’s statement. Borrowers can choose to pay off the minimum or any amount up to the full balance. Because interest is usually charged after 30 days, some people pay off the full balance monthly and in effect have free credit.

The downside with credit cards is that they are expensive to run if the full amount is not paid off. Interest rates of around 15% APR are not uncommon; compared to a loan, this is quite high. So why don’t we cut up our cards and take out lots of little loans? Standard loans do not bene

h credit cards is that they are expensive to run if the full amount is not paid off. Interest rates of around 15% APR are not uncommon; compared to a loan, this is quite high. So why don’t we cut up our cards and take out lots of little loans? Standard loans do not benefit from the instant availability of credit, but more importantly they have a set repayment every month. Fines for non-payment exist as with credit cards, but standard loans also have charges applicable if repayment is made early.

So is there halfway house? There is now. Many lenders are offering flexible loans that benefit from the convenience of a credit card without the high interest. Repayments usually have some sort of minimum, but they are flexible and there are no charges for settling the balance. Some flexible loans will even allow you to top up the borrowed amount without charges (whereas a credit card will charge for cash withdrawals).

Flexible loans are popular among people whose income is irregular, for example contract workers, freelancers or those with seasonal professions. As long as the loan is paid off as per the contract, charges are restricted to interest.

Are there any reasons not to get a flexible loan? It should be noted that the APR of a flexible loan will be somewhere between a standard loan and a credit card, so