One of the most common forms of debt here in the UK is credit card debt, and as a result of the high interest rates that often accompany credit cards, this kind of debt can be particularly difficult to pay off. Interestingly according to a new report from the BBC, credit card providers are having to compete increasingly hard to win business from customers, offering a range of incentives including cash back offers, free balance transfers, and extended interest-free periods in order to attract business.
Some believe that 0% cards could ultimately save consumers money. For example according to the article “an individual using a card with the market average annual percentage rate (APR) of 18.9% would spend an extra £268.36 paying back a £2,000 purchase over 18 months, compared with a 0% interest card”. It has also been suggested that in certain instances zero interest credit cards can be better than taking out a personal loan, providing consumers are strict with the upkeep of their repayments.
However there are also concerns that these 0% interest credit cards may lure more people into debt, and there have been a number of warnings over these interest free deals. Worryingly, according to the article, research from the University of Bristol has revealed that interest-free deals can entice some people to spend more than they can afford, leading them into debt, and can be the start of a slippery slope. The researchers expressed concerns that such deals can leave people with a false sense of security, and that many fail to understand exactly how credit cards work, leading to further problem down the line when the interest-free period comes to an end.
When it comes to tackling debt, seeking the right advice is vital. If you are struggling with credit card or other forms of debt then here at Scottish Debt Help we can help. We offer a range of money advisory services and have many years of experience of providing debt solutions in Scotland. For more information please do not hesitate to contact us and a member of our knowledgeable team will be happy to assist you with your enquiries.