Some people spend all their lives managing debts, but it needn’t have to be that way – with the help of a professional adviser you can clear that debt and start saving instead of spending.

Credit card debt in particular is very expensive to manage. According to Defaqto, with a typical APR and minimum payment plan to pay off a £1,000 credit card balance would take nearly 15 years at 9.9%, 21 years at 15.9% and more than 37 years if the rate was at 20.9%.

David Black, banking specialist at Defaqto, says: “The dangers of making low minimum repayments cannot be emphasised enough. Someone making a minimum 2% monthly repayment on a £1,000 balance on a credit card charging 20.9% APR would take 37 years one month to clear the balance.”

It doesn’t help that many credit cards demand you pay off the cheapest purchases first, leaving the bigger, more expensive payments stuck on the card – simply, there is no upside to credit card debt.

So get out of the credit card debt cycle and talk to a professional adviser about moving all your debts onto a secured loan. By using your home’s equity you can be free of the burden of debts with huge repayment rates and instead enjoy one, affordable rate that will give you the time and the space to finally save instead of just spend.

SOURCE: Defaqto, 18/03/10

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