Credit cards: Keeping in the black
Brits dreaming of a black Christmas
Friday, 02 Nov 2007 08:39
A quarter of Britons are aiming to avoid using their credit cards over the run-up to Christmas and to stay in the black.
A poll by debt consultancy Thomas Charles reveals Brits are aiming to change spending behaviour as debt burdens start to increase as interest rate rises lead some to use credit to meet day-to-day expenses.
Personal debt in Britain stands at £1.3 trillion with £216.2 billion owed on personal loans, credit cards and overdrafts, and 15 per cent of adults are now classed as struggling with debt, owing unsecured debt of over £10,000.
As debts mount, the research reveals 30 per cent of 35 to 44-year-olds are aiming to cut credit card spending and 42 per cent of 18 to 34-year-olds are planning to cut back on 'entertainment' spending in the run-up to Christmas.
"The personal debt situation in Britain has reached breaking point, and recent personal banking instability has brought debt to the forefront of the agenda," said James Falla, managing director of Thomas Charles.
"These results show that Britons are finally making positive steps towards confronting the amount of debt they are carrying."
He added: "This is good news for the man on the street, but may signify bad news for retailers who have come to rely upon the vast amounts of credit spent at Christmas time.
"There is still a massive debt mountain for Britain to climb, but this report signifies that the bad news about debt is finally sinking in."
Thomas Charles has now put together tips for those facing debt problems:
Do not ignore debts. Put together a budget sheet detailing all your incomings and outgoings to work out your financial position.
Consider transferring credit card debt to a 0% card, but do not use the card for spending. Use the breathing space to deal with more pressing bills like council tax or mortgage payments.
Be wary about consolidation loans to pay off existing debt, unless you are disciplined and do not use the loan for anything else.
Talk to Citizens Advice or other debt advice services if debts are getting out of hand.
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