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Swapping expensive debt for cheap debt

There are many people in the UK who have mortgage debt, credit card debt and loan debts and appear unsure as to how they should attack these particular issues in the short to medium term. The simple solution is to pay down your most expensive debt as soon as possible because this will incur higher interest charges and will ultimately cost you more in the long run. However, you also need to appreciate that there will be minimum payments on your mortgage, loans and other relatively low cost debt which need to be taken into account.

It is imperative that you take financial advice if you are in a situation where you have various lines of debt and are unsure which should be paid off first. It is not always as simple as paying off the most expensive debt first but this is an interesting angle to start from. If you take a step back it is easy to see how many people in the UK are now encountering substantial debt problems with a growing number unable to cover all of their minimum payments.

This is an issue which will come further to the fore in the first quarter of 2010 as consumers in the UK receive their December credit card statements and demands for payment. Literally hundreds of millions of pounds were spent on credit cards in the immediate run-up to the festive period and this could well continue into the New Year. But is this really sensible?

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