Families 'starting to take more prudent approach to finances' to avoid debt problems
Families 'starting to take more prudent approach to finances' to avoid debt problems
- Monday, 24 January 2011Families need to avoid taking out loans and credit cards as this form of borrowing may cause them to need
debt help in the future.
Martin Bamford, chartered financial planner and managing director of Informed Choice, stated that one of the ways to avoid needing a loan is by mapping out a budget and putting some money aside in case of an emergency.
He also gave tips on how to become
debt-free after borrowing too much on a credit card.
Mr Bamford advised: "The most effective way to reduce the cost of
credit card debt is to borrow less.
"This means changing your spending habits in the first place to stop further borrowing and then working out a plan for repayment of existing debt, starting with the most expensive debt first."
If a family follows this advice, they may be able to pay off their
debt problems sooner rather than later.
According to PricewaterhouseCoopers, levels of unsecured borrowing fell by £500 in 2010.
However, the firm also warned that interest rates on borrowing could increase by two to three per cent.

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