1 November 2006
The Association of British Credit Unions Limited(ABCUL) declared yesterday that consumers who are having problems controlling their finances should look to personal loans rather than applying for credit cards.
Abbie Shelton, a spokesperson for ABCUL, said that personal loans were better as far as the consumer was concerned because they were more structured than a credit card agreement: "With credit cards a lot of people just pay back the minimum and it is a decade before they've repaid the loan."
Ms Shelton's comments came after the Debt Counsellors announced that debts from credit card payments are the biggest cause of serious debt in the UK.
Their research proved that credit card debt is a factor in 91% of all serious debt cases. Store credit cards, which carry higher interest rates, are also to blame as they are a factor in 41% of cases.
Ms Shelton also agreed with the sentiments of the Financial Services Authority (FSA), which has been calling for consumers to be provided with more knowledge about how best to look after their personal finances.
"I know the FSA is putting a big accent on financial education at the moment," she said, before commenting that although information was available, the majority of the public did not know where to find it.
"Maybe the providers could point people in that direction. There are very good facilities out there to help people learn about how to better manage their money," she concluded.
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