Existing debt problem ‘driving credit promotions’
The debt problem in the UK is driving banks to offer evermore favourable promotions on credit cards, it has been claimed.
Susan Hannums, savings manager for AWD Chase de Vere, notes the proliferation of special offers as banks look to sign up new credit card clients.
And she advises caution in taking advantage of such deals, as they could add to the customer’s existing debt problem.
Ms Hannums gives the example of a credit card offering a free flight, which she says is likely to carry an “astronomical” interest rate.
She asks: “Are you going to take advantage of the free flight and pay off your credit card?
“Or are you going to whack on a massive amount [of spending]?”
“There is so much existing debt already out there and this is the problem,” she adds, suggesting that the banks stand to profit “hugely” from customers who do not use their credit cards effectively.
However, expert advice could prevent credit cards from worsening an existing debt problem for many Britons.
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