Monday, November 13, 2006
Category:
Consolidation
New figures from moneysupermarket.com show that million of Brits are potentially facing big credit card bills each year by selecting the incorrect credit card product.
Around ten per cent (three million) of the UK's credit card carrying population – 31.6 million people in total – may seemingly have picked the wrong credit card.
These wrong decisions over a year could be costing consumers in the region of £120 million in interest charges. Among the problems consumers are facing is that two out of five people do not clear their balance in full each month, which leads to increased debt through a negative payment hierarchy.
Rob Kenley, head of credit cards at moneysupermarket.com, said: "Credit cards offer an easy and appealing payment solution, but not being savvy about how to use them can cost consumers a lot of money.
"It is important to work out why you need to use a credit card and in turn, seek out the appropriate one to match your needs. Don't be taken in by the headline rates on offer because the cheapest deals do not automatically signal that the card is right for you. As always, when it comes to financial products a bit of planning and research will help you minimise the risks of paying more than you need to."
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Consumers who select the wrong credit card can often find themselves in financial difficulty and debt if they do not manage their repayments properly. A debt
consolidation package can aid consumers to tidy up their finances and possiblly reduce their monthly repayments. It is however important to remember that repaying borrowing over a longer term will increase overall interest charges.
