Wednesday 16th of December 2009
If you have been tripped up over credit card debts and plummeted further into the red than expected then you may not be alone in the potential for requiring an individual voluntary arrangement (IVA) to sort your finances out.
A new poll from Nationwide reveals that over half of you would be shocked, angry or surprised if you discovered that your credit card lender used your repayments to clear your smallest balance.
This method leaves interest to accumulate on the largest debt, which could mean you are never able to stay on top of repayments.
If you find yourself juggling a number of credit card debts topping £15,000 then you may find an IVA is a better answer than your lender’s method.
An IVA can merge your credit card debts together and freeze the interest, giving you a better chance of clearing what you owe.
"This lack of understanding means many of those who have an outstanding balance on their credit card end up paying a huge amount of interest and the debt sentence can last for years - decades in some cases," warns Clare Francis of moneysupermarket.com.
By Neil Burton
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVAs may help cut 'problematic' unsecured debts
