Millions wasted on credit card debt payments

Brits are squandering millions every year on unnecessary interest payments on their credit cards, despite also saving money for the future.

Recent research by Fool.co.uk has found that around one in every six people with an average of £450 pounds worth of credit card debt are simultaneously saving £3,000 for a “rainy day”.

British cardholders pay an average of £165 annually on interest, with an outstanding balance of £1,100 at 15 per cent. Meanwhile they are earning just £66 interest on savings accounts at six per cent.

David Kuo, head of personal finance at Fool.co.uk, commented: “We are often told to put aside money for a rainy day because having a ready source of funds for emergencies is a sensible thing to do – and it is.

“[However], saving money before you have paid off your debts is like trying to fill a bath without putting the plug in first. It’s a pointless exercise that results in a waste of water, an empty bath and hefty water bills.”

Those aged between 34 and 41 are the most likely to be saving at the same time as paying hefty interest on credit card debts.

Tags: emergencies, future.Recent research, credit card debt, fool, pointless exercise, home, saving money, interest payments

Personal loans an option for home improvers

Personal loans are an option that people considering carrying out expensive work on their homes should consider, Alliance & Leicester has said.

According to the company, improvements such as loft conversions can add up to £100,000 to the value of a home.

However, developments like these do not come cheap, with the average cots of a dormer loft conversion currently around £23,000.

Many homeowners may instantly think to add such an expense to their mortgage, but Alliance & Leicester claims that a personal loan could be up to £15,000 cheaper in terms of interest payments.

“Carrying out home improvements instead of moving can have amazing results, potentially increasing the value of your existing property and also saving a great deal of money as well,” said Richard Al-Dabbagh, senior personal loans manager for Alliance & Leicester.

“If you are looking to undertake a sizeable home improvement, there will be a massive temptation to simply take out a further advance on your mortgage. But a personal loan could represent a cheaper alternative for those who can afford higher monthly repayments over the shorter term.”

Tags: property, home improvement, loft conversions, dormer loft conversion, work