Wednesday 12th of May 2010
Individual voluntary arrangements (IVAs) could be a sensible option for Brits who own reward credit cards but are overpaying on interest rates.
According to moneysupermarket.com, 56 per cent of plastic users choose their credit products depending on the incentives - such as cashback and air miles - available to them.
However, Andrew Hagger, spokesperson for Moneynet.co.uk, says: "You need to make sure that you’re definitely going to pay your card balance off every month to really benefit from these [rewards]."
Asking IVA questions though, could help out if this is currently something of a struggle.
Juggling mounting credit card debts, interest rates and the cost of essential everyday items can be difficult, but if you owe more than £15,000 on plastic, IVAs could be the first step towards getting your finances back on track.
They could have you completely debt-free after five years of discipline and hard work, merging your repayments into one monthly reduced-rate outlay at the same time.
Mr Hagger explains interest often "more than wipe[s] out any benefits" your reward card offers - but IVAs freeze this interest and could potentially give you a renewed grip on your finances.
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