Borrowers advised to clear card debt in the New Year
Borrowers who managed to overspend on their credit cards during the Christmas break, have been advised to pay more than the minimum amount required by their provider, in order to clear their balances as quickly as possible in the New Year.
A representative for the consumer credit council suggested that Brits should regard the New Year as the ideal time to rectify their financial positions, focusing their efforts primarily on reducing, if not completely clearing their ancillary debts.
Studies show that credit cards are one of the most common ways for consumers to quickly rack up debts in the New Year for a number of reasons, however, opting to pay back the smallest amount required by the provider, is recognised as being the biggest downfall for the majority of card users. This type of action prolongs the amount of time in which the borrower remains in debt, whilst also luring them into a false sense of security in that their balance does not ever really reduce, even though frequent payments are being made.
One expert suggested that in certain situations, a debt consolidation loan could provide effective relief from smaller debts (credit cards), providing that the plan is competitively priced.
