People's focus on credit card repayments "understandable"

Consumers may have been more inclined to make credit card debt repayments in recent months, rather than saving their cash, an expert suggests.

According to the Moneynet spokesperson Andrew Hagger, low saving rates might have led to such a trend.

"The interest rates for savings are very low on savings accounts, so many people may have decided to put more efforts into their mortgage or credit cards, which is understandable," he commented.

He believes that this might be proving a useful option for some because interest rates on people's debts have often been greater than saving rates in recent months.

Meanwhile, Mr Hagger suggests that a number of UK workers may have had to use a portion of their existing savings last year, in order to deal with the impact of the recession.

The base interest rate set by the Bank of England currently stands at 0.5 per cent.

Posted by Tom Burroughs.