‘Stop paying interest on debt’ to save cash

Consumers have been advised to explore ways they can stop paying any interest on debts in order to save cash.

According to lovemoney.com, switching to a nought per cent balance transfer credit card is one way to go about reducing arrears.

Such tools offer customers deals such as 20 months interest-free on all balance transfers with a marginal transfer fee, which means the consumer will have the best part of two years to pay off their balance without any interest building on it.

Furthermore, the finance website recommended researching the ‘stoozing’ method, which could be an option for people who are able to pay off more than their minimum credit card payment on a monthly basis.

The system works by paying off the minimum owed on plastic and putting the extra cash that had been earmarked for helping to write off this debt in a savings account where it will gather interest.

When it comes to savings accounts, the site admitted that it is slim pickings in terms of profitable rates up for grabs, however better deals than the one consumers may be tied up with at present can be found by using price comparison sites.

To benefit from stoozing, the website stated that before the nought per cent period closes, the consumer takes the money from the kitty and pays off the rest of the arrears with a bonus of a sum of interest.

This follows a study from Aviva, which revealed that debt repayments now account for ten per cent of a British family’s income, compared to just eight per cent in January of this year.

By James Francis