Wednesday 27th of May 2009
Borrowers looking to solve their debt problems can take action over credit cards in order to reduce what they owe, it has been suggested.
According to moneysupermarket.com, significant savings can be made by paying back more than the minimum amount through direct debit.
The price comparison site explained that a typical borrower that owes £1,000 at a rate of 16.9 per cent may only have to pay back two per cent each month - leaving them owing more than £920 after a year.
But it suggested that increasing this to five or even ten per cent would mean the debt is paid off much more quickly.
However, the reality for many consumers is likely to be that they are unable to afford such action and they may wish to seek advice on other debt solutions.
These could debt management programmes, through which an informal agreement can be reached with credit card companies and other lenders in order to lower repayments.
R3 recently suggested that the number of people with debt worries in the UK could be much higher than official figures suggest, with around one million thought to be affected.
