Wednesday 18th of November 2009
Credit card users intent on using plastic to fund their Christmas are advised to use zero per cent deals to minimise the damage it does to their debt, but some may wish to seek individual voluntary arrangement (IVA) advice to discuss a different way out of trouble.
Price comparison site Moneynet.co.uk has stated that it believes consumers have two options this festive season - to use an existing credit card and then transfer the debt on to a zero per cent card at a later date, or simply apply for a new low-rate card now.
Almost half (45 per cent) of Britons admit they are worried about how they will fund Christmas and 17 per cent have already decided to cover costs with credit cards.
Either of Moneynet.com’s options could mean a long-term reliance on credit cards, which could lead to serious debt problems.
One way to avoid this could be to take out an IVA - a financial strategy which could see interest rates on unsecured debt frozen and repayment periods made more affordable for debtors.
By using an IVA to deal with existing unsecured debt, at a repayment rate which is more manageable, consumers may have more free cash to use to fund their future festive celebrations and avoid increased reliance on plastic.
By Neil Burton
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