Pay down credit card debt with savings
Pay down credit card debt with savings
- Tuesday, 9 March 2010People could manage their
credit card debt by way of using some of their savings, it has been claimed.
According to moneysupermarket.com, the option was a wise one considering the current environment of low savings rates coupled with rising inflation.
The organisation states that repaying just £20 per month extra off a credit card bill would reduce the overall interest by a third, and the balance would be repaid 17 years earlier.
Peter Harrison, credit card expert at moneysupermarket.com, said while times are tight for many households, the figures send a clear message to those who may have some savings put away.
"Saving is still important and it makes sense for households to keep some money aside for a rainy day, but where savings rates are low, canny consumers can look at alternative ways to make their money work harder for them, whether this is through earning interest or reducing it elsewhere," he said.
Meanwhile, recent research from uSwitch reveals that 5.4 million people are spending more than they take home every month, while around 13 million are just breaking even.
Nearly half (48 per cent) of those who overspend are relying on overdrafts and 34 per cent are using credit cards, according to the study.

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