Credit Card Debt Advice in the UK
Credit Card debt is the single main reason why the majority of people with severe financial problems cannot break out of the debt spiral.
Just a few basic financial facts highlight just how “hooked on plastic” we as a nation actually are –
- There are more than 1600 differently branded credit cards available in the UK.
- More than 100 million credit cards are in circulation across the UK.
- More than 40% of people do not or cannot pay their balance off each month.
- Total UK debt on credit cards alone currently stands at more than £50 Billion.
- The amount of credit card debt hit an all time high in 2008.
If you owe just £3000 on an average UK credit card and simply maintain minimum payments it could take you more than 20 YEARS to pay off the balance!
With monthly credit card repayments often at little more than 2.5% of the actual balance outstanding (that’s £25 monthly for every £1000 you owe) it is easy to see why people often end up using credit cards to live on each month and “Rob Peter to pay Paul” through balance transfers in order to make ends meet. Even more worrying is that some banks allow credit cards to be consolidated into unsecured loans and then leave the credit card spending limits intact to leave people with a loan and even more credit card debt on top!
Credit cards should never be seen as a long term borrowing option. The average interest rates payable at 16% or more are at least twice as expensive as an average comparable loan, so it makes sense where possible to minimise credit card spend in favour of less expensive forms of borrowing. The theory of swapping out of more expensive credit and store cards in lower interest rate loans is all very well for those who are able to do so. However for an increasing number of people in the UK these options are not available and a monthly juggling act takes place between all the competing debts for a diminishing amount of disposable income.
If you want to break out of the credit card debt spiral then call us today on 0800 043 50 43 for a FREE and confidential discussion on all your credit card consolidation options.