Lots of people use credit cards to pay for everyday items and then settle the bill at the end of the month.
This makes using the credit card an easy source of free credit.
Others aren’t as fortunate, and use them to fund ongoing essential purchases.
When they are unable to repay the bill at the end of the month, it makes credit cards a fairly expensive source of credit.
Interest rates will typically start at 20% apr and run up to over 50% apr.
Any unpaid balance will grow very quickly and soon become unmanageable.
Now is the time of year when the cost of Christmas on a credit card will become due.
It is also the time of year when for those in business, the tax bill is due.
It can also be when the business will be in a slight downturn following Christmas and new year, meaning there isn’t much spare cash around.
A recent article in Business Insider set out reasons to use a personal loan to settle credit card debt.
– Personal loans have an interest rate in the region of 3% to 10% apr which is much lower that credit cards.
– They also need only one payment making it easier to plan for and harder to miss than paying a range of credit cards at different dates.
– As they will be for a fixed duration, they give what is effectively a ‘debt free date’.
Personal loans aren’t a perfect cure for debt problems as they need to be repaid, but they can be a good solution in the right circumstances
At Harrisons Business Rescue, we can help with a range of solutions for personal and business debt that work for you
The initial conversation and advice is free.
The fist step to becoming debt free is to talk to us
The full article in Business Insider can be found here