Friday 1st of October 2010
Credit cards can appear to be a practical way of funding purchases, but the debt often starts to mount up if you find yourself unable to meet repayments every month.
Information on individual voluntary arrangements (IVAs) may, however, be beneficial for those of you who find yourself more than £15,000 in the red as a result of persistent plastic use.
According to a spokeswoman for the Consumer Credit Counselling Service, people who want to apply for a credit card should always consider whether they're going to be able to pay back what they owe at the end of every month.
She explains: "The danger is if you just end up paying the minimum each much it's going to cost you a lot more in the long run."
The expert adds if you get charged by the card provider, a relatively small amount of debt can snowball and end up taking "years to pay off".
If you've found yourself with serious money troubles as a result of your unsecured lending, info on IVAs might be extremely useful.
That's because the measure could have you completely debt free at the end of the process, which requires you to meet around 60 monthly repayments.
And you might find your money becomes much easier to manage as a result, as an IVA freezes the interest on the cash you owe.
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
- Information on IVAs could offer you a way out of debt woes
