Consumers advised to become debt clear before saving
Consumers advised to become debt clear before saving
- Tuesday, 21 December 2010Consumers have been advised to pay off their
debt problems before putting money into savings accounts as interest rates are low.
This means that more of the money paid will actually go towards becoming debt free rather than being used on interest charges.
That is according to Ed Bowsher, head of consumer finance at lovemoney.com, who also stated that it is useful to have some savings.
He said: "If you're wondering whether to pay down your debt or put money in a savings account, I'd say it's normally best to pay down debt.
"While interest rates are low, more of your repayments will go towards paying off your actual debt rather than on interest charges."
Mr Bowsher added that consumers who start paying off their
debt problems now will be less affected by a rise in interest rates as their debt will be lower.
Research from Equifax found that 36.1 per cent of consumers are taking advantage of the low interest rates and have accessed their credit file in order to pay off their debts.

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