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Credit cards are handy things to have, for sure. You don’t have to carry large amounts of cash around, you can buy things over the internet, and you know you’ve always got money when you need it.

But there’s always the temptation to spend more than you have; something the banks really encourage you to do, because then they make lots of money out of you. The Credit part of the credit card is the trap.

Credit card interest rates are often the highest interest you ever pay outside of loans from loan sharks. In my country at this moment it’s running at about 24% per annum. This is a quick way to get into financial trouble.

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Most credit cards give you the option of withdrawing a cash advance from your line of credit on your card. You just go to any ATM, and use your credit card to withdraw cash as if it were a debit card. This might seem like an attractive option—sometimes cash is just handier than using plastic. In theory, it seems like it should be the same as using your credit card to purchase goods for an equivalent amount. Unfortunately, people who use their cards to get cash advances while under this impression are in for a big shock.

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Although low-rate loans are becoming increasingly scarce, prospective borrowers can still access competitively-priced products, it has been suggested.

In research released by MoneyExpert, the typical annual interest on an unsecured loan of 5,000 pounds stands at about 9.44 per cent, with the most expensive and cheapest rates standing at 13 and 6.7 per cent respectively. Meanwhile, just four lenders are offering products with interest of less than seven per cent. According to the price comparison website, the diminishing availability of cheap loans is due to the impact of the credit crunch which has seen a number of financial services providers hike the interest rates attached to their products and become stricter with borrowing criteria in an attempt to make sure that consumers will be able to afford repayments.

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When immersed and spiralling in debt, one’s only resort to building financial well - being is bankruptcy. However, before making a decision to file for bankruptcy, you need to ask yourself these few questions and determine your final state. Following these tips will help you to avoid bankruptcy.

Are you able to avoid claiming bankruptcy by cutting extravagant expenses, trimming your lifestyle, liquidating your assets, getting another job, negotiating with creditors to reduce your interest on payments or setting up a debt-consolidation program?

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With over 9,600 merchants that accept the American Express AIR MILES credit card throughout Canada, accumulation of reward miles is really not that difficult. When you build up adequate miles for redemption, you will get a chance to travel for free, to and from the destination of your choice. Rewards may include stays at selected resorts, package vacations and cruises, travel and hotels, and merchandise rewards.

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