Credit Cards Terms Under Review as Equity Release Eases Debt
Managing credit card debt is currently under serious consideration by the government as the number of equity release plans taken out to pay back arrears increase.
The government aims to stop credit card companies raising interest rates on already accumulated debt and flippantly increasing people’s spending capacity – often surpassing their earning potential.
They are also advocating higher minimum payments on large debts and regular payments to ensure that credit card arrears are managed better.
Equity release schemes for homeowners are currently proving to be a popular means with which to tackle escalating credit card debts.
Re-paying Credit Card Debt Constitutes a Third of Equity Release Plans
As many homeowners approach retirement, balancing the books is vitally important and an equity release plan has the potential to unlock money in your house to supplement income.
Research, by Key Retirement Solutions, shows that during the third quarter of 2009 the number of equity release plans increased by 19% in comparison with the previous two quarters. This suggested a growing confidence in the market but with a third of all equity release plans unlocked used to clear debt it suggests people’s attitudes to managing finances is shifting.
A Think Money expert is quoted as saying: “At a time like now, it is particularly important that people take steps to take control of their debts - and releasing equity is just one of the ways they may be able to do this.
“We would advise anyone who is struggling with their debts to consider all the alternatives that may be available to them.”
Easing the Burden of Debt Using Equity Release
Phil Jones of Which? is backing the government proposals to better control credit card debt telling the BBC: “We think it’s simply wrong to entice people into spending more than they can afford and then to squeeze as much money out of them as possible.”
For those managing credit card debts a lifetime mortgage – the most popular equity release plan on the market – offers homeowners the chance to release a lump sum or regular payments to supplement their income.
By consolidating your existing unsecured debts, you may extend the term and overall cost of these debts.
For no-obligation advice on whether equity release could help you and information on the best plans please call our 24 hour helpline and speak to one of our advisors:
Or use the comments box below to ask a question.
Equity Release may involve a Lifetime Mortgage or Home Reversion Plan. To understand the features and risks ask for a personalised illustration.
Age Partnership provides initial advice at no cost and without obligation. Only if you choose to proceed and your equity release case completes would a typical fee of 1.5% of the amount released or £795 be payable.
Important things to consider about equity release:
- Equity release could affect your current or future entitlement to means-tested benefits
- Releasing equity to spend in your lifetime can reduce the amount that is left in your estate when you pass away
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