Consumers with credit card debt charging high levels of interest have been advised to address this first.
David Kuo, director at the Motley Fool, suggested that those considering debt management tactics should focus their focus their attention on forms of borrowing that are most expensive.
He explained that those who are able to overpay on their mortgages due to lower interest rates should pay off credit card debt instead, as this is likely to be more beneficial in the long term.
“No matter how small that credit card debt is in comparison to the size of your mortgage you have to try and repay that credit card bill as quickly as possible,” said Mr Kuo.
Last month, Nationwide called for legislation to be introduced that would ensure credit card providers allocate repayments to the most expensive forms of debt first, following news that such action is being taken in the US.
By Andy Mackay