Britons focus on credit card repayments

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New bank figures show that when it comes to credit cards, Britons are no longer in spend mode, instead concentrating on repaying their debts.

According to the British Bankers' Association (BBA), credit card borrowing fell for the eighth time in nine months in January, with people spending £500 million less on their cards.

BBA director of statistics David Dooks said: "Prudent repayments, particularly on credit card accounts, are keeping the unsecured credit picture very subdued."

However, Britons are still borrowing money for mortgages, with January mortgage lending 15 per cent higher than in the same month of last year, with £16.6 billion lent.

An underlying total of 141,200 mortgages were approved during January, at an average value of £146,700.

Global Insight chief economist Howard Archer commented: "This is clearly a consequence of consumers striving to curb their use of credit cards, or finding less expensive ways of financing their spending by switching more to secured borrowing.

"With debt levels rising and many people stretching themselves to the limit in buying a house, there is clearly an increasing need for many consumers to do all that they can to improve their finances."

Former smokers 'should use money saved towards mortgage repayments'

Smokers who kick the habit could see financial benefits as well as health advantages, according to new research.

A study by John Charcol found that people who smoke ten cigarettes per day could save £84 per month by quitting, while those who smoke 20 and 40 per day could save £168 and £336 respectively.

Additionally, the mortgage broker suggests that people who apply these savings to their mortgage repayments stand to make large savings.

Its data indicates that a person who has a 25-year repayment mortgage could save more than £29,000 in interest if they applied the money saved by quitting smoking to mortgage repayments.

This technique could shave eight years off such a mortgage, the data states.

Following those calculations, the firm says that people who quit a 30-a-day habit could save £36,698 in interest, while those who give up their daily 40 cigarettes could save £41,963 in interest.

Drew Wotherspoon of Charcol.co.uk commented: "When smokers look at what quitting can do to their finances it may provide that added incentive to finally stub out the habit."

"Coupled with savings on life assurance premiums and even some home contents insurance policies, there really is a great financial argument for not lighting-up, as well as the obvious benefit to your health."

Charcol offers mortgage advice from a panel of lenders.

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