Consumers should pay debt rather than save to avoid debt problems
Consumers should pay debt rather than save to avoid debt problems
- Tuesday, 8 February 2011Putting money towards clearing your debts is a better way forward than saving money, an expert has said.
According to John Miles, business development director at insurance comparison site gocompare.com, record low interest rates have diminished the power of people's savings.
For those suffering
debt problems, paying their dues should definitely be the priority as they will struggle to get a return on any money they attempt to save.
He said: "If you have
credit card debt or a personal loan, it may be wiser to pay this down before you consider saving."
"Paying back £100 on a debt with an 18.9 per cent interest rate could make a lot more sense than saving £100 and earning 0.25 per cent interest," he added.
Mr Miles' comments came after the latest statistics from Credit Action revealed this month that more than £178 million is being paid by UK consumers on a daily basis to service interest on their personal debts.

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