Savers 'wasting money' on credit cards
Published On 28 November 2007
People in the UK have money put away for the future but are simultaneously wasting money on credit card charges.According to research from Fool, the average Briton has £869 in their current accounts from month-to-month that doesn't get used, with savings of £2,526.
But they also maintain an average credit card debt of £1,137 from month to month meaning they are potentially throwing money away paying interest on the balance.
The study calculated that a balance of £1,100 at a rate of 15 per cent would require £165 in interest each year. In a savings account at six per cent, the same amount would receive £66 interest.
"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," said David Kuo from the finance site.
"But it makes little sense to have a stash of money earning interest at six per cent a year when a pile of debt is burning a hole in our finances at 15 per cent annually."
A recent report from Abbey found that 23 per cent of credit cardholders intend to consolidate their outstanding balances into one value for money card.
