ING Direct, a Dutch owned bank, found savings on average fell by approximately £100 to just under £1700 in the past year. The bank surveyed a number of the population in the UK and 10% say they eliminated their debt in over the last year. The average amount owed on unsecured loans, credit cards and hired purchase agreements fell to an 18 month low says ING to an average of £2,500.

The statistics come as a surprise since many families are pinching pennies to meet the high cost of living throughout the UK. Petrol prices are only 1p short of all time record highs and within the fortnight will exceed even that says AA.

At the same time Britain is in a price hike energy bill with Eon and npower ready to join Scottish Power, Scottish and Sothern and British Gas in increasing typical bills by over 20% in the next few weeks.

The Savings Monitor for ING that is said to track the ordinary Briton’s savings behavior said it is at its lowest point in three years. The horrid rate of .5% from the Bank of England for the past 29 months has not helped either. When it nose dived in March of 2009 so did savings rates this discouraging the average saver from putting away their nest egg.

Not until the latter part of July of this year the average was able to come back over the 1% mark for the first time in 30 months. What is positive in this gloom is that people are turning towards their own savings to pay off debt instead of turning to credit to ease the squeeze.

The report shows there is a determination within the public to reduce even further their debts and to eventually rebuild their savings and the priority for savings is growing little by little. But with the why the current economy is it may prove hard for the average consumer to meet both of these goals in the short term. This raid on savings accounts has caused financial institutes to impose harsh penalties on account holders for dipping in too often.

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Stress levels increase when the monthly payment decisions are made and it is at this point when one considers taking a loan to pay off the credit card account. This is false economy and, in fact, increases your liability.

The little gimmicks some companies use when advising indebtedness should also be considered with care. Where a company allows skipping a monthly payment or states a minimum amount payable, this must also be viewed carefully. By doing this the company eventually extract more money from the customer by charging interest for a longer period.

It is no use dealing with payments by using one card to pay off another. More money is paid back in the long run. There are a number of standards or ways that can be employed to alleviate the debt crisis.

Speak to the credit card company and request a lower repayment plan or schedule. Discuss a lower interest rate with them. Some banks and credit card companies are very flexible especially if they get the idea that changing the account to another institution might be an option. The banks make more money on a long term loan than they do if a loan is paid up.

Concentrate on paying one credit card account off at a time rather than paying equal amounts to a number of cards. Never consider consolidating your debts unless all the implications have been carefully thought out. There are far too many pitfalls in this choice. The ultimate objective for anyone who owes money is to reduce the borrowings to a minimum and solutions that suit best should be investigated.

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Most credit cards charge interest that is about 16%, so the best way to shop for a credit card if you plan on using it frequently is to look for cards that offer 0% on new purchases such as the Sainsbury’s Finance MasterCard for Nectar Holders and the Tesco Bank Clubcard Credit card MasterCard.

Both of the above mentioned cards offer a years’ worth of free interest on all purchases so you have an entire year to pay off the credit before worrying about the interest.  Of course, you will need to make sure that you pay the balance off before the year of interest free perks come to an end, otherwise you will still be stuck paying interest on your purchases.

On the other hand, if you have large amount of debt on a credit card and want to get out of the interest, the best way to proceed is to transfer it over to a 1% interest card and get a few months to make payments without interest so that you can start to make a dent in the debt.

The BT Visa by Barclaycard Platinum for example allows you to pay 15 months without interest, which can be a significant amount of time to start ploughing through your debt.

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