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Economic problems have prompted the Bank of England's monetary policy committee to cut the base rate from 5.5 per cent in January 2008 to its current level of 1.5 per cent.

Many banks and building societies have reacted to the trend by reducing the rates offered to savers, who now find it difficult to obtain a good return on their money.

During times when savings rates were healthy, consumers faced a dilemma about whether to invest spare cash or use it to reduce their credit card balances.

However, with little in the way of returns on offer to savers, Real Simple has suggested that consumers would be better off if they allocate any spare money to increasing their debt repayments.

In fact, it even suggested savers would benefit from withdrawing money from their accounts in order to make inroads into outstanding credit card balances.

Nick Jacobs of the National Foundation for Credit Counselling backed the strategy, explaining: "You will work off the balance faster and reduce the total amount of money that you will pay out over the long term."

Posted by Alex Adams

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Credit Cards	0% Balance Transfers	0% Purchases	APR Representative (Variable)
	Tesco ClubCard Credit Card
	9 months	15 months	16.9%
** 16.9% APR representative (variable). Based on a credit limit of 1200 and purchase rate 16.9% p.a(variable). **
	Virgin Credit Card
	20 months	3 months	16.8%
** 16.8% APR representative (variable). Based on a credit limit of 1200 and purchase rate 16.8% p.a(variable). **
	Barclaycard Platinum with BT
	22 months	3 months	17.5%
** 17.5% APR representative (variable). Based on a credit limit of 1200 and purchase rate 17.5% p.a(variable). **
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