Consumers need to get out of debt and save
Consumers need to get out of debt and save
- Thursday, 20 January 2011Consumers have been advised to balance becoming
debt-free with putting some money into their savings account.
Richard Talbot, director of Credit Action, made this recommendation as interest rates on saving accounts are currently low, while interest rates on debt could be higher.
He said: "It's kind of a balance in life, we would encourage people to have some rainy day savings, but once they've got something put aside for emergencies then it would be a lot better to pay off the highest interest rate debt first."
In this way, consumers with
debt problems will be able to pay off their financial arrears faster and without accruing extra money on top due to interest rates.
Mr Talbot added that having some savings is important in case an emergency occurs as those without a financial safety net may have to borrow money and could risk needing a
debt solution in the future.
According to research from Lloyds TSB, 11 per cent of Brits stated that taking control of their finances was their New Years resolution.

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