Many credit cardholders are wasting money by paying interest payments on outstanding balances, while putting money aside in savings, it has been claimed.
Research by Fool.co.uk found that one in six people who have between £400 and £500 in credit card debt also have £3,000 set aside in savings.
The firm suggested that people are still paying the interest on their outstanding credit card balance despite having the money available to pay off their debt in full.
David Kuo, head of personal finance at Fool.co.uk, said that having money set aside in savings for emergencies is a "sensible" thing to do.
"But it makes little sense to have a stash of money earning interest at six per cent a year when a pile of debt is burning a hole in our finances at 15 per cent annually," he commented.
In related news, Abbey recently found that 7.7 million credit cardholders are aiming to reduce the number of cards they have by consolidating them onto one that offers better value.
News Side
Credit cardholders 'wasting money on interest'
Wed, 28 Nov 2007
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