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Why it pays to pay down debt

July 9, 2010 – 2:19 pm

Today at midday, the Bank of England will announce its latest decision about the base rate. For most people, the most important thing about the base rate is the impact it has on interest rates – on their mortgage and/or their savings.

Looking at the base rate, The Telegraph`s personal finance editor Ian Cowie wrote a blog called `Why you should pay down debt even if bank rate remains frozen`.

It starts by reporting that a poll by Reuters found that 61 economists said the Bank should keep the base rate at 0.5% today.

For savers, this wouldn`t be good news. Today`s low interest rates mean most savers are actually losing money in real terms, thanks to inflation (currently at 3.4% or 5.1%, depending on which figure you use – CPI or RPI). Read full article…

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Wipe out Credit Card Debt, Fund Savings

July 9, 2010 – 12:19 am

People who are working to pay off credit card debt often dream about the things they may be able to buy once they have paid off their bills. But a good debt reduction plan doesn’t erase monthly payments just so you can go out and buy more stuff. Start planning ahead now to set up savings accounts to help you have a brighter financial future.

Emergency Savings

Everyone should have an emergency savings account. Even as you are working on your debt reduction plan it is a good idea to put aside some funds into an emergency savings. Having an extra $500 or $1,000 that can be used for unexpected medical expenses or car repairs can give you peace of mind. On

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Debt Management: Benefits and Drawbacks of Debt Consolidation Loans

July 6, 2010 – 6:53 am

High interest rates and fees can make paying off credit card debt difficult, but you may be able to improve your progress by borrowing to pay off your debt. The key is borrowing enough to pay off credit card debt at a much lower APR than your existing debts carry. APR, or annual percentage rate, is the amount of interest and finance charges expressed as an annual percentage of a balance owed. The APR for each of your accounts appears on your monthly statements.

Debt Consolidation: Considering Your Options

Several factors impact your ability to borrow money for debt consolidation:

• Amount of your debt: It can be difficult to get debt consolidation loans when you have thousands of dollars in credit card debt.

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Debt Consolidation Efforts Hindered by Vague Rules

July 6, 2010 – 1:50 am

If you own a credit card from Discover, American Express or Citi, the odds are good that their penalty practices can hurt your efforts at debt consolidation. A new survey by a credit-card tracking site reported that most major credit card companies still do a poor job of explaining to their customers the way they assess late fees and levy financial penalties. This is particularly disappointing because the federal governments Credit CARD Act, passed last year with great fanfare, was supposed to revamp these processes. The legislation was supposed to make the penalty structures of credit card companies easier for consumers to understand.

Late Fees, Debt Consolidation

During these challenging economic times, many consumers have had to turn to debt consolidation loans to get a handle on their outstanding revolving debt.

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Over 50s can`t afford to enjoy retirement because of debts

July 6, 2010 – 12:58 am

According to a study by Saga Equity Release, 17% of over 50s are left with very little money to enjoy their retirement once they have repaid their debts, while 41% of retirees find repaying their debts difficult, headlinemoney.co.uk reports.

However, more and more over 60s are now taking out equity release plans to unlock money from their homes so they can enjoy a `better quality of life in retirement`.

Figures show that 13% of over 55s are retiring in debt, and 40% of this age group have used equity release as a way to repay these – leaving them `better off in real terms` and free to enjoy their retirement. Read full article…

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