Britons spent first 50 days of 2010 paying off debt interest

By myfinances.co.uk staff

It took the first 50 days of 2010 for Britons to earn enough to pay off the interest on their consumer borrowing, making February 20th Debt Freedom Day.

This is according to independent financial adviser Unbiased.co.uk, which pointed out that meeting the interest payments means people have not yet made a dent on their actual debt.

Its figures show that over the course of 2009, credit card balances rose by around £4 billion to over £54 billion, while levels of personal loan debt remained constant despite many banks tightening their lending criteria.

Unbiased.co.uk chief executive Karen Barrett said that with the Bank of England's base rate at a record low of 0.5 per cent, now could be a good time for people to service their debt and "get back in control of their finances".

Meanwhile, the Consumer Credit Counselling Service said there are a number of "warning signs" that debt is getting out of control.

These include a person only making minimum payments on credit cards, not knowing the total amount they owe, lying to friends or family about borrowing or using credit to repay loans or credit cards.