Secured loans may be cheaper than rising credit card rates

Choosing a secured loan rather than spending on credit cards may be cheaper in the long run.

This is because many card providers are increasing their rates - an issue Michelle Slade from Moneyfacts.co.uk recently commented on.

She said rates are getting higher because more and more people are defaulting on their repayments.

In addition, unsecured loans such as these are the first thing consumers forgo when they are struggling financially.

Ms Slade had some advice for those who want to minimise paying levies to lenders.

"Taking cash out on your credit card should always be avoided as the interest rate is usually over 25 per cent per annum and, unlike on purchases, interest is charged from day one."

Price comparison website uSwitch.com recently warned users of Egg credit cards that charges for withdrawing cash were to increase next month from £3 to £5.

It added that some providers have increased this fee by up to four per cent in the last year.


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