Consumers urged to 'check small print' for debt management
Consumers urged to 'check small print' for debt management
Thursday 2nd April 2009
According to the Daily Mail, most people are in the habit of making credit card debts the top priority when attempting to get their personal finances into shape, as these are traditionally the most expensive borrowings.
However, consumers should be aware that personal overdraft rates have been creeping up in recent months and may now exceed credit card charges in many instances.
"Check the small print on bills, then pay off the one that is costing you the most," the newspaper advises.
The Daily Mail explains that Lloyds TSB, the UK's largest provider of current accounts, has overdraft rates ranging from 10.4 per cent to 19.3 per cent.
However, borrowers should also not become complacent over their credit card debts, as the majority of cards are set up to automatically pay off the cheapest transactions first.
"So while most of your credit card debt might be sitting on a lower rate than an overdraft, you may be better off paying the card debt so you can tackle the cash withdrawal borrowing quicker," the publication states.
The newspaper also notes that although a student loan is likely to be the most "sizeable debt" for many people, it does not appear on credit scores and should therefore be paid off "only when you have no other debts".
People looking for debt management solutions were recently urged to try living to a monthly budget by personal finance website the Thrifty Scot.
News article brought to you by Debt1 - UK debt management specialists.
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