You have to pay interest on any money you borrow, so make sure you know the APR (annual percentage rate of interest) and the total amount you will have to pay back.
Shop around for the best deal as interest rates vary, and always read your credit agreement before you sign it. Get independent advice if you are unsure about anything.
Credit cards and store cards
You and the other parent may both be legally liable for joint credit or store card accounts. Even if you cancel joint cards, either of you can be made to pay the whole debt.
Second card-holders
Having a ‘second card’ for a card account doesn’t make the account a joint one. The person who signed to open the account is the ‘main cardholder’. They are legally responsible for the account and can cancel the second card at any time.
Loans
Be very careful if you take out a secured loan (backed up by an asset like your home). The interest rate on these loans may be lower, but you could lose your home if you can’t pay.
Some companies offer ‘consolidation’ loans that combine all your debts into one. If you repay an existing debt with borrowed money, you may have to pay an early-repayment charge on it. Take independent advice before you combine your debts – see our useful organisations for where to get advice.
