Selling your endowment to meet your credit card responsibilities

Publication date | 23/02/2010

Britons with climbing credit card bills may want to take action as soon as possible to strengthen their financial standing.

One financial expert has said that it is the responsibility of people to make sure they do not fall seriously into the red.

Chris Tapp, director of Credit Action, was commenting on the claims of former government adviser Ros Altmann, who told the BBC that a regulator should be brought in to prevent "excessive" credit card interest rates.

The chief executive officer of aap Chris Radford said some of its customers with high levels of debt had decided to sell their underachieving endowment policies in order to raise the money required to clear credit card balances.

People are not forced to take on high credit card charges

Mr Tapp said that individuals are aware of the consequences of taking on high-interest credit cards and, as such, have to realise they need to dig themselves out of debt.

Credit cards may be seen as a convenient option when large expenses have to be covered but the finances are not currently available to meet these.

While Mr Tapp concedes that consumers do need a voice in the industry he said the state of their finances is down to them.

"If the rates on credit cards are too much and it might be too expensive for them to pay back then they don't have to use the products. Nobody is forcing consumers to pay more than they must," he said.

"The companies should be able to charge whatever they like. If credit cards are not competitive, then people should refuse to use the product," he added.

One way Britons may decide to shoulder the responsibility of debt is by selling their endowment policies to raise a significant sum of money.

Selling your endowments could help you get out of debt

Mr Radford, from aap, said rather than continue to rely on credit cards to cover expenses, some of its customers had decided to sell their unwanted endowments so they could become debt free and make a fresh financial start.

He added that should aap make an offer to purchase an endowment policy it will always pay more than the surrender value offered by the insurance company.

Reasons to sell your endowment policy