Avoid reward accounts for credit card debt consolidation, says compareprepaid.co.uk

www.moneynews.co.uk > Credit cards > Avoid reward accounts for credit card debt consolidation, says compareprepaid.co.uk

Avoid reward accounts for credit card debt consolidation, says compareprepaid.co.uk

Wed 13th Oct 2010

While reward accounts may be good for some consumers, they should generally not be used for credit card debt consolidation, according to a compareprepaid.co.uk representative.

Raffick Marday explained that such accounts can be great if a person is clearing the balance each month, with all sorts of reward schemes on offer, such as Tesco Clubcard or Nectar points.

However, he described how there is "little point" in using reward products if people are transferring over a balance from other cards.

"Many reward credit cards also offer competitive balance transfer rates so you can shift credit card debts to them. This is not advisable," said Mr Marday.

The compareprepaid.co.uk spokesperson explained that people will be charged interest if they do not clear their balance, which wipes out the benefit from any reward they receive from a product.

His comments were made in response to a study by the British Bankers' Association, which indicated the number of credit cards in issue fell from 64 million to 61 million between August 2009 and the same month this year.

Click here for more credit cards news

Related News : Credit cards
	Brits spent less in the run-up to Christmas 2011
	Credit card spending fell in 2011
	Credit cards 'can be a useful budgeting tool'
	Credit card usage 'to rise this month'
	New measures to help Brits with finances
	Credit card spending 'less prolific in the last 12 months'
	AA Launches new reward credit card
	Borrowings 'still need to be repaid' during a gap year
	Clear information in credit agreements called for
	Brits 'focusing on zero per cent cards'