According to uSwitch, those borrowers who choose credit cards over cheap loans – and opt to only pay off the minimum amount each month – risk extending the time it takes to repay debt by up to 30 years. The warning follows news that both Barclaycard and M&S Money have dropped their minimum payment amounts to less than 2.5 per cent.

Barclays is currently asking customers for a monthly installment of 2.25 per cent, down from 2.5 per cent, while borrowers with M&S Money credit cards can pay as little as 2.5 per cent a month, down from three per cent. Incidentally, the price comparison service suggests that to help negate debt management problems, the credit card industry should introduce a minimum repayment limit of three per cent.

“There is little justification for setting minimum repayments at just two per cent and we believe that it is time that the industry agreed a standard minimum repayment amount of at least three per cent on all credit cards”, said uSwitch personal finance expert Mike Naylor.

He added that despite moves to put ‘health warnings’ on credit card statements and to make literature easier to understand, the majority of borrowers still do not comprehend the problems associated with only paying the minimum amount each month. Mr Naylor suggested that by only paying off credit card debt in small amounts consumers could end up paying off mortgages and secured loans before clearing card balances.

“In an environment of rising interest rates where personal debt in the UK has reached a staggering 1,325 billion pounds, of which credit card debt accounts for 54 billion, consumers could now finish repaying their mortgage before their credit card, despite the huge disparity in sums borrowed”, he elaborated.

uSwitch research found that 3.5 million Britons could spend 30 years struggling with debt management if choosing to only make minimum repayments. However paying a little more each month could see borrowers cut their “debt sentence” by 15 years and generate collective interest savings of 5.5 billion pounds.

Figures released today by the British Bankers Association (BBA) suggest that borrowers are slowly beginning to turn away from credit cards and seek out cheap loans for their financial needs instead. Lending on plastic fell by 0.1 billion pounds over the course of June, the association revealed, while personal loans remained popular. Borrowing on loans and overdrafts was up by 0.1 billion pounds last month and secured loan lending grew by an underlying 5.1 billion pounds.

Meanwhile, Toby Clark, senior finance analyst at Mintel, recently said that Britons are “wildly underestimating” how much money they owe on credit cards and personal loans. The expert was speaking after research from the firm revealed that 21 million consumers owe 100 billion pounds more than they estimate.

First, assess your current credit situation. If your credit history has a consistent pattern of timely payments, you may well qualify for any of the low APR balance transfer credit cards. Transferring all or some of your outstanding balances to this card can help you to save thousands of dollars, annually, in interest charges. With planning and exercising discipline, you can bring down your large credit card balance. You can take advantage of the low APR, and apply all the money you save on the interest to the principal.

Many low APR balance transfer credit cards offer zero interest on balance transfers for a period ranging from six months to one year. They start to charge interest after the expiry of this period. It is imperative that you find out what interest they will be charging at that time. As of September 2005, most credit card companies typically charge APR of 10.24%, and this increases dramatically if you default on any agreement with your credit card company. You need to shop around to ensure that your cheap balance transfer credit card do not turn out to be expensive.

Many credit card companies offer zero interest on balance transfer, but charge a processing or a transaction fee. This could be as high as 4% of the balance being transferred. Look out for companies that charge a flat fee irrespective of the balance you transfer. Many companies charge a flat rate of $50 to $75 as processing or transaction fee.

Low APR balance transfer credit cards seem very attractive, but you need to look into some hype:

- Check the period of the low APR on balance.
- Check the rate after this period expires.
- Is there any balance-transfer fee? A flat 4% transaction fee means the higher balance you have the higher fee you pay. Look for companies charging a flat amount.

Balance transfer credit cards are indeed one of the best ways for you to slowly eliminate credit card debts due to high interest. The rest will be up to your discipline to wisely spend money on credit cards.

Many restaurateurs and retailers in these countries now have the facility to get you to authorise your bill in euros but then they recharge your card in sterling. That sounds innocent but there’s a sting in the tail. The retailers charge you an additional service fee of up to 4%! The system is called dynamic currency conversion (DCC).

DCC guidelines from Visa say that UK cardholders should be offered the option to either have their card charged in euros or to have the transaction changed into sterling before it goes through. It seems that in practice, few of us are being offered the alternative. Many retailers are charging us in sterling automatically – and with the extra 4% fee!

The language barrier might explain the lack of explanation but we are a little more cynical! Even where permission is sought, we doubt whether many restaurateurs or retailers will clearly spell out the additional service fee. After all it’s an opportunity to make a bit more profit!

Our advice is that when abroad in euro-land always ensure that your transaction is processed in euros. That’s because some UK card operators such as Nationwide, Saga and Lombard Direct will convert euros to sterling at no charge. Others, such as cards from our high street banks, will charge 2.75% as a foreign currency loading fee – but even that’s less than the retailers’ 4% DCC.

In fact even with a 2.75% foreign currency loading fee, it’ll still be cheaper to use your credit card rather than converting sterling to euros before leaving the UK or converting it abroad at the bureau de change. That’s because the exchange rates applied by Visa and Mastercard are often much better than you’d get for your cash and travellers cheques whilst abroad. And please don’t be fooled by the commission free advertising outside the bureau de change. They might not charges commission but their currency rates are never cheap – after all, how else do they make a crust?

And another bit of helpful advice. Unless it’s an emergency don’t be tempted to use your plastic to withdraw euros. That’s because as with all cash withdrawals, interest will be charged from the minute the euros leave the cash dispenser. Remember, there’s never any interest free period on cash withdrawals.

And whilst on points to remember, please be especially vigilant about card security whilst abroad, especially if you’re travelling in Eastern Europe. Card fraudsters love holidaymakers and business travellers. That’s because they’re able to enjoy a bit more time with the card before the card is blocked. Chip and pin technology has helped enormously but there are still risks to watch out for. A report we read last week serves to highlight the problem.

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So claims MoneyExpert, which believes that the credit crunch is driving lenders to restrict the borrowing options of those they believe may not be able to address their debts. It observes that the cost of maintaining such credit cards – rather than choosing possible alternatives such as debt consolidation – has increased over the last six months and may well continue to do so.

The Retail Bulletin reports that although the Bank of England’s monetary policy committee has effected three quarter per cent reductions of the base rate in the last few months – from 5.75 per cent to five per cent – the credit crunch means that customers with borrowing accumulated on credit cards are nonetheless suffering.

According to MoneyExpert figures, the standard annual percentage rate on purchases made with a credit card has risen by more than half a per cent in the last six months, from 16.56 per cent to 17.12 per cent. Furthermore, those shifting debt from one card to another as balanace transfers have seen interest rates soar by 0.83 per cent from 15.12 per cent to 15.95 per cent.

Consumers who do find that they are juggling debts on a number of credit cards and loans may find that a consolidation loan could help them to address their debts. By combining debts into one monthly payment, consumers may be able to regain control of their financial situation and begin to pay off the money that they owe. Such a move could also improve the clarity of a debtor’s situation, with a clear debt-free date established as a result.

The news follows a recent debt monitor published by Chiltern which reveals that the average UK debtor is 44 years old and owes varying sums to eight creditors. It reports figures described as “encouraging”, observing that the average amount owed is currently 400 pounds lower than it was at the beginning of the year. Chiltern believes that the change in the way Britons are approaching their debts results from a general recognition of tightening financial circumstances and the need to minimise borrowing. One way of achieving such an aim is to investigate debt consolidation loans.

The company advises anyone with a number of debts to draw up a budget, calculating incoming funds and outgoing financial responsibilities. Should the sum needing to be repaid on a monthly basis exceed that coming in, then it is necessary for the consumer in question to seek financial assistance, such as financial advice from an independent source.

Chiltern’s assertions reinforce earlier observations from the Co-Operative Bank, which states that not enough people are undertaking appropriate financial planning. It stated in particular that two-thirds of women have not taken the time to set up a tax-efficient savings account, amounting to 20.3 million people. The company described the demographic as the “biggest losers” when it came to tax-free savings.

Those consumers keen to save but currently struggling under the burden of multiple debts might consider a debt consolidation loan as a potential solution, putting them back on track to be in a position to save.

The group state that there are fewer personal loans available now that there has been, as a result of the credit crunch the lenders are less likely to lend. It was claimed that the total approved borrowing on unsecured loans dropped by the huge sum of 13 million pounds last month. And with inflation still soaring like an albatross circling overhead as the UKs finances head towards glacial waters, many consumers are looking to plug the gap left by the shrinking personal loans markets by ramping up spending on credit cards. The price comparison site claims that during September, plastic expenditure rose by 130 million pounds.

However, uSwitch warned that people may be putting themselves at risk of some heavy financial blows by neglecting to use their credit cards wisely. They claim that interest rates charged by providers for cash withdrawals from credit cards has increased by 41 per cent. The group explained that the average annual percentage repayment for cash withdrawals now stands at 29.97 per cent, meaning that consumers are forking out an additional 161 million pounds in interest when compared to typical rates seen in 2005.

For those who have been struggling with their finances lately, they may find that taking out a consolidation loan may be useful in helping them reorganise their outgoings, and reducing their monthly expenditure.

However, head of personal finance at uSwitch, Simeon Linstead, claims that consumers should check all options when looking for a credit card provider.

“The credit card industry is always changing, and even the most switched on people could be forgiven for not keeping up with increased charges and changes made to terms and conditions. On the other hand, providers depend on the fact that their attempts to keep their margins by adding fees and increasing charges will not cause too many problems for them. As consumers are likely to only start feeling the full impact of the global financial meltdown in 2009, now is not the time to be naive when shopping around for a new credit card or lethargic when it comes to reviewing existing borrowing,” he said.

Mr Linstead explained that it is more important than ever to reorganise finances and seek out the most competitive arrangements, as economic indicators point towards a recession and a sustained period of belt tightening. He concluded by urging consumers to remember that the more that is spent on interest repayments, the less money can be put towards clearing debt burdens, something which will become increasingly important in the coming months.

For consumers looking for a way to reorganise their outgoings as money markets tighten and spending soars, taking out a debt consolidation loan may prove effective. Applying for this type of loan may be particularly useful for those who have found themselves stung by uncompetitive energy tariffs. Earlier this month, Confused warned that consumers are wasting millions because of a failure to switch suppliers.

The relative newcomer on the “pay off credit card debt” scene is debt settlement. Actually debt settlement has been around for a long time, but the credit card companies didn’t want the consumer to know that they are willing to settle your debt for a smaller percentage of your total. In fact, a typical settlement amount is 50%, and some companies lately have been offering 20%. That means if you owe $1000, the credit card company would settle for $200. Great deal, huh?

Well, could be. Be aware however, your credit score will take a direct hit. And you will most likely have to endure a barrage of phone calls and mail from the credit card company. And, there is always the possibility of a lawsuit.

So how can you take advantage of debt settlement? One way is to hire a third party to handle everything for you. They will negotiate with your creditors to agree to a lower amount, and they should field all the phone calls. Their service does not come cheap however.

You can settle with your creditors yourself, saving thousands of dollars in the process. Many times, the creditors will offer a settlement amount automatically. In fact some of the so called debt settlement experts do nothing more than pass along a creditors settlement offer!

Do it yourself debt settlement is stressful, but it can be done, and has been done by many, many people who asked themselves “how can I pay off credit card debt?”

Credit Card Debt Management means taking all existing credit card payments and putting them together into one monthly payment. This means one interest rate on the entire balance instead of multiple interest rates for each bill. This can save a debtor’s a lot of money in the long run, and enables him to pay off the credit card debt sooner. No more late fees are another perk to credit card debt management. By making one low monthly payment each month, late fees will not be accrued.

Proper planning and anticipating financial trouble are essential to money management. A saving account for emergency usage only is the best way to avert danger. By sometimes, due to a debtor’s financial situation, it is impossible to start saving money; sometimes anticipating financial problems is not enough. But consolidation all credit card debts before the rough time hit can help greatly down the road. The monthly payment remains the same until the debt is paid off. There are no fluctuating interest rates.

There are many suggestive remarks that borrowers should considers as of the success of their credit card debt management plan. Only, but what individuals can afford to pay in full amount. If you decide to keep a credit card, pay it off every month.

Money market has kept financial equanimity at offering this debt consolidation advice. First, you must decide what type of card debt program you want and need. There are basically two types of credit cards, unsecured card debt program are those that are not secured with cash. They are based on your past credit history. Secured consolidation plans are those that are secured with a certain amount of cash. Your credit limit is usually equal to the amount of cash with which you have secured the card. The benefit here is building your credit history with small purchases each month and total payoff at the end of each month.

The idea behind balance due consolidation is to replace a number of higher interest card with a single financial obligation that carries a lower interest rate. Over time, this can save a great deal of money. The preferred, debt consolidation advice for credit card, method of securing a debt consolidation loan for those with bad credit is to borrow against the value of your home. If you do not own a home, or if the current market value of your home does not exceed the remaining balance on the loan, a credit counselor may be able to help you by negotiating lower interest rates from your existing creditors. Find out what debt consolidation options are right for you.

There are many lenders availing online and offline, however processing through online is preferred these days. The method is simple and time saving. Entire of the processing is done online; a very simple application form is filled in. and later of the work is worked out by the counselor you selected.

These credit fighting programs enable you to combine and mush up all your existing debts into a single loan scheme that is to be paid at single interest rate. You can pay off the money through single interest rates because there is a single loan as replacement of your existing debts related with cards. Single interest rates and single loan repayment is a acknowledged better option than having multiple debts with multiple interest charged on them.

However, there are both the regular options available here. Secured options seek the security pledging and in lieu of the security assurance, the borrower can grab cheap rates in the loans. Again, the unsecured options allow you to have the cash without pledging any collateral and thus, it is the burden free option. Anyway these are one of the best options to combat your rating even. Through consolidation of your card debts, you can surely spruce up the rating.

Anyway, credit card debt consolidation programs are available online. Here you are not asked to pay a single buck for applying. Also you need to fill up only a small and easy application to apply for them.

Especially after the holidays, store-specific credit cards may be overwhelming you. Each one of these cards usually features higher-than-normal interest rates, and can be very challenging to pay down because each one requires different payment dates and minimum balances. Under the provision of Credit Card Debt Management, entire of credit bills is organised into a smaller payment that proves to be the best way to manage your credit card situation.

If you do not think you are being treated properly by your first choice for debt relief services, promptly seek out a new alternative. Again, you will be working with this company for at least a few months, so make sure they are treating you with the respect dignity that you deserve. For this reason, we urge you to choose from the select partners.

For all that, fortunately, there is numerous credit card debt management firms that operate on the internet today that can help you gain back control on your financial life, without the tremendous damage that can result in filing for bankruptcy. The most important part of choosing debt management is to decide to act quickly and decisively. It may mean that you have to cut back on some short-term, personal luxuries, but in the long run you will be able to achieve the financial freedom you deserve.

One of the reasons why online credit card debt management companies have been growing in popularity over the last five years is that, since these companies require no brick and mortar maintenance expenses, they can afford to process loans at lower rates and provide round the clock customer care.