Credit card spending “doesn’t feel like spending”. This, according to recent research from Barclays, is an attitude shared by around a third of young people. And, let’s face it, by many of us to a degree.

Be that as it may, the after effects are real enough. Figures from Go Compare suggest that 22% of British consumers will be carrying credit card debt throughout 2011, with some still paying for last Christmas half way through the year.

Reducing credit card debt can be a challenge – especially given current interest rates averaging 16.79% according to the Bank of England (other sources give higher averages). Awareness of the different rates charged by different cards is crucial. Picking off higher rate cards first – often store cards fall into that category – must be a sensible tactic.

There can be a tendency to build up a credit card debt and imagine it will be whittled away by paying off the minimum. This strategy comes with a serious health warning from financial experts, who point out that a relatively modest debt of say £3,000 can linger for several decades if treated in this way. Again, it’s the interest charges which are crucial.

Switching cards is often advised. That 0% balance transfer sounds attractive, but beware of fees charged each time the debt is moved. And keep careful track of the expiry date of your deal, when a higher interest rate kicks in.

Another approach is to consolidate your debts, by remortgaging. Here, there is the opportunity to take advantage of the lower, average interest rates charged for mortgage borrowing, by drawing on equity built up in your home. If you’re leading a busy life, it can also help with financial management – by simplifying your monthly payments and cutting down on the number of interest rates you need to watch.

Consolidation through a secured loan is a further option, and can also help you reduce your monthly outgoings. As with remortgaging, you will need to take into account any fees, along with the fact that you are using your home as security for a debt. A specialist broker such as Go Remortgage can supply you with the facts and figures to make your own assessment.

Tags: Business, Companies, Economy

This entry was posted on Friday, March 4th, 2011 at 1:40 pm and is filed under Money Saving Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.