Credit cards Updated:
Credit card customers have been urged to consider overpaying in order to reduce their debt level.
Defaqto has noted that as interest rates have fallen, consumers may benefit from taking advantage of the opportunity to clear balances.
Principal consultant for banking at the firm David Black remarked: "With lower interest rates your monthly payments may reduce, but by overpaying the minimum amount required each month you will begin to reduce your debt more quickly."
He also suggested that mortgage customers do the same, but only in the event that early repayment penalties would not be charged.
Defaqto also advised consumers not to view cancelling of insurance for unsecured loans as a means to save money, as this could be needed in the event of a loss of income.
Sainsbury's Bank recently urged shoppers to use a reward credit card for small purchases, but to ensure that balances are paid off each month to avoid interest charges.
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