Sunday, December 24, 2006
Category:
Consolidation
In the run up to Christmas, Alliance & Leicester warned that spending on credit cards could leave consumers up to £1500 out of pocket.
As many as 23% of people were reported to have used store cards to help pay towards Christmas spending and over half said that this was simply down to being offered the cards at the point of purchase.
Consumers with total debts of £7500 could save up to £1500 in interest charges by consolidating their debts with a debt consolidation loan according to Alliance & Leicester. Their survey revealed that a quarter of consumers with one some kind of debt would consider consolidating debts into one loan at a cheaper rate, while 31% of those intending to consolidate debts recognised that moving all debts into one loan could reduce the amount paid each month.
Among those planning to consolidate debts with a loan, one in five individuals had a New Year goal to pay off their debts in 2007. Some stated that they needed the discipline of set monthly repayments in order to pay off more than the interest on their debts while 10% said that they were fed up of having credit and store card debts that they weren’t paying off.
Richard Al-Dabbagh, Senior Personal Loans Manager at Alliance & Leicester, said ‘ Christmas costs can really add up, and some of the offers pushed at us by sales assistants in connection with their store cards can seem really tempting. The real costs of these ‘discounts’, however, may be with you for a long time as interest payments stack up.’
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Individuals who have several cards with high balances could consider consolidating these with a
secured loan. One of many options to consolidate debt, a secured loan will wrap all monthly payments into one. Secured loans can usually be repaid over 5 to 25 years. It is however important to remember that repaying borrowing over a longer term will increase overall interest charges.
