Tricky credit cards play havoc with repayments

Posted 2007-11-19

Concern about personal debt has caused Britons to look more carefully at their credit card repayments. According to Nationwide, a financial services provider, up to 69% of credit card holders and borrowers do not know where their repayments actually go. 

A spokesperson warned that repayments will often go towards the cheapest parts of the debt, such as balance transfers and interest, while leaving any new borrowing untouched.

“Many credit card providers use low introductory rates to lure people into opening an account,” said Divisional Director Jeremy Wood, “These offers can look very appealing, but when you scratch beneath the surface you discover that credit card holders often don’t receive the full benefit”. 

One recommended way of beating off credit card debt is for consumers to secure a debt consolidation loan. With the benefits of a fixed repayment schedule (and often lower interest rates,) coupled with the added purchasing power, a debt consolidation loan can literally save “hundreds of pounds” according to Loans Manager Steven Baillie. 

The extra funds commonly available within a debt consolidation loan could also work toward paying off the typical festive spending of holiday season shopping. Consumers are therefore encouraged to shop for more than just pretty packages – and put extra effort instead into shopping credit card interest rates vs. available loan consolidation rates.

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