Shopping for a new laptop this year? Borrow safely with the right credit card


The vast majority of Britons hope to upgrade their possessions in the next few years, according to new research by Direct Line. While most people will save until they can afford to bring their belongings up to date, the study suggests that a significant proportion plan to use credit cards to fund such purchases. Choosing the right credit card could help to reduce the cost of this type of borrowing, say experts.For example, Britons who plan to upgrade their possessions but have failed to save the required amount could benefit from a credit card that offers 0% interest on new purchases for a set time. However, this strategy will only work if you are disciplined about paying your credit card bill on time. 


Nation's upgrades would cost £230bn
Almost all Britons (96%) are keen to upgrade their possessions, according to the latest Direct Line Aspiration Index, which suggests that most people hope to have a new watch, handbag, car or laptop within the next five years. Buying the latest models will not come cheap, however. The research indicates that people typically expect to spend £500 on a new watch, £270 on laptop upgrades and more than £3,000 on their car. Overall, the nation is set to fork out £230bn in order to meet these aspirations.

One in four undeterred by recession
Even the economic climate has failed to put people off wanting new things. According to the poll of 2,017 adults -- which was carried out this month by Opinium Research -- a quarter of respondents have not lost their desire for the latest models, despite the recession and government spending cuts. Three-fifths of people say that they will simply save until they have enough money to buy whatever they want, while one in five expect to cut back on meals out in order to raise the funds. However, 15% admit that they plan to use their credit card to upgrade their possessions.

0% credit card could help
Stuart Ballantyne, head of Select from Direct Line, said: "Many of us will always be on the look-out for the next big trend or designer, but the question is, can we afford it? For those who are realistic about what they want and are saving hard to achieve them, then their goals are in sight. But beware if your solution is to rely on credit."

One way to mitigate the cost of borrowing is to use a credit card that offers 0% on purchases for an extended period. This allows the cardholder to buy the desired item and spread the cost of repayments over the 0% period without paying any interest. Care should be taken to make the final payment on time, however, as the card will revert to its standard APR once the 0% period has ended.

See related: Online credit spending averages £192 a month; Pay off 0% credit card debt before rate expires

Published: 28 February 2011