Credit card debt can be piled up easily by consumers who borrow on cards with a zero per cent introductory rate but then fail to switch before it reve…
Credit card debt can be piled up easily by consumers who borrow on cards with a zero per cent introductory rate but then fail to switch before it reverts to its standard annual percentage rate, an expert has warned.
This can leave customers facing high rates on large balances and Yvonne Goodwin, managing director at Yvonne Goodwin Wealth Management, said this is something she has always advised her clients to be wary of.
Others are not so careful, she noted, stating: "As I understand it though, as far as the general public are concerned, I think people have taken advantage of credit cards, the zero per cent credit cards, [but] when it comes to an end it just tends to run on with a great rate of interest."
Older people who have got into debt through this route and others can end up retiring while still owing money, the expert noted.
Ms Goodwin suggested a debt management plan may be a useful device for those seeking to tackle a situation arising from being stung for interest on cards with introductory rates.
Failing to plan for when a credit card rate will revert to its standard level may not be the only way in which consumers can run up large debt bills through taking the wrong approach towards their future finances.
Earlier this week, managing director of moneymaxim.co.uk Mark Bower said people who use credit to pay off higher bills are simply "postponing the pain", since the likelihood is costs such as increased utility bills are probably here to stay and as a result those adding to their debt now will ace a combination of repayments and higher bills.
By James Francis