If I asked you whether you are on top of your finances you would probably say yes, right? However, you may not be aware of the hidden costs as discussed below that are draining your financial resources without you being aware of it. Luckily, you can re-educate yourself and put a stop to this; read on to find out how.

Poor credit score

Now, you may not realise that if your three-digit credit score is low, it could be costing you extra money! In fact, the smaller it is, the harder it can be to get credit and lenders will charge you higher interest rates. This basically means that those with a lower credit score will be charged more for the same things than those with higher ones.

Luckily there is a way to rectify this, by repairing your credit report. This is something you can do by learning how to remove negative items from credit report yourself, or by going to a professional repair company that can perform this service for you. Then, as long as you keep up with your payments and ensure they are on time your credit score should rise to a much healthier figure, in turn preventing any unnecessary drain on your finances – just remember not to go wild with your new found financial freedom and rack up more debt!

Bank Charges

It has always struck me as weird that banks charge people for going into their overdrafts because, it means that those with the least end up being punished for it and sometimes it’s just unavoidable! Of course, these aren’t only banking fees that you may be paying either as you may have to paid up for a premium account that you don’t really need, or had a returned cheque or direct debit.

The thing to do here to avoid these is to keep a better eye on your spending which can stop you incurring such charges. Also, take a good long look at the advantages of your premium account and review whether they are worth the monthly cost? If not, swap back down to normal one and save yourself some money!

Catalogue shopping

Now, I know that shopping via a catalogue can be very convenient, after all you don’t have to drag yourself to a store and try things on in that awful white fluorescent light in the changes rooms. In fact, you can do everything from the comfort of your own home and even pair new items with older pieces to see if they work well in your wardrobe.

However, if you are going to shop in this way then make sure that you buy the items outright instead of putting them on your account. Why? Well, catalogue credit accounts often have an insanely high-interest rate of 30% or over. This means that even if you only buy a few items you can pretty much never pay them off as long as you are just fulfilling the minimum payment each month. Of course you are then charged more interest on what you owe and the whole cycle begins again and becomes an ever-present drain on your finances. Not to mention you’re paying way over the odds for each item you buy.

To that end, refrain from adding items to your catalogue credit account and shop in normal stores instead. Even if you think you are just buying items from the catalogue to try them on the temptation will be strong to keep them and pay for them later! Buy now pay later deals lure us in, but who actually pays them before the interest free period runs out?

Have you ever experienced hidden charges for your every day finances? How do you keep on top of them?