Consumers who have numerous debts on credit cards may find
that their financial situation takes a turn for the worse
in the coming months as lenders tighten the screws.
So claims MoneyExpert, which believes that the credit
crunch is driving lenders to restrict the borrowing options
of those they believe may not be able to address their
debts. It observes that the cost of maintaining such credit
cards - rather than choosing possible alternatives such as
debt consolidation - has increased over the last six months
and may well continue to do so.
The Retail Bulletin reports that although the Bank of
England's monetary policy committee has effected three
quarter per cent reductions of the base rate in the last
few months - from 5.75 per cent to five per cent - the
credit crunch means that customers with borrowing
accumulated on credit cards are nonetheless suffering.
According to MoneyExpert figures, the standard annual
percentage rate on purchases made with a credit card has
risen by more than half a per cent in the last six months,
from 16.56 per cent to 17.12 per cent. Furthermore, those
shifting debt from one card to another as balanace
transfers have seen interest rates soar by 0.83 per cent
from 15.12 per cent to 15.95 per cent.
Consumers who do find that they are juggling debts on a
number of credit cards and loans may find that a
consolidation loan could help them to address their debts.
By combining debts into one monthly payment, consumers may
be able to regain control of their financial situation and
begin to pay off the money that they owe. Such a move could
also improve the clarity of a debtor's situation, with a
clear debt-free date established as a result.
The news follows a recent debt monitor published by
Chiltern which reveals that the average UK debtor is 44
years old and owes varying sums to eight creditors. It
reports figures described as "encouraging", observing that
the average amount owed is currently 400 pounds lower than
it was at the beginning of the year. Chiltern believes that
the change in the way Britons are approaching their debts
results from a general recognition of tightening financial
circumstances and the need to minimise borrowing. One way
of achieving such an aim is to investigate debt
consolidation loans.
The company advises anyone with a number of debts to draw
up a budget, calculating incoming funds and outgoing
financial responsibilities. Should the sum needing to be
repaid on a monthly basis exceed that coming in, then it is
necessary for the consumer in question to seek financial
assistance, such as financial advice from an independent
source.
Chiltern's assertions reinforce earlier observations from
the Co-Operative Bank, which states that not enough people
are undertaking appropriate financial planning. It stated
in particular that two-thirds of women have not taken the
time to set up a tax-efficient savings account, amounting
to 20.3 million people. The company described the
demographic as the "biggest losers" when it came to
tax-free savings.
Those consumers keen to save but currently struggling under
the burden of multiple debts might consider a debt
consolidation loan as a potential solution, putting them
back on track to be in a position to save.
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Abbi Rouse writes for All About Loans where visitors can
apply online for cheap loans. We also specialise in bad
credit loans, and debt consolidation. Vist Today:
http://www.allaboutloans.co.uk
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