Credit Card Debt Can Creep Up on You20 January, 2016
Pay off the most expensive debt first
For anyone who finds themselves in the red, the amount of debt you owe isn’t necessarily the most important factor. Whether you have credit card debt or student loan, the key lies in paying off the most expensive debt first. For example, if you borrow on a credit card in Hong Kong on a revolving basis you could be facing annual interest charges of up to 35%!
If you have enough spare cash, it could well be worth trying to pay down expensive debt rather than putting it into a savings account or other form of long-term investment: your financial situation will be improved if you choose to wipe out a debt running at 35% interest rather than use the same money to save at, say, 0.2% a year.
With our personal loan product at Monexo more than a third of our customers use their loan for debt consolidation. This means looking for a new, cheaper form of credit that can clear any borrowing at high rates of interest and get their monthly repayments down to a more manageable level at a fixed sum each month.
Most importantly, interest rates on a Monexo personal loan tend to be significantly lower than the standard credit card APR. At the moment, Monexo charges as little 7% and up to 23% APR compared to the 30% to 35% APR charged on a credit cards.