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UK credit card debts left to pile up
Wed 24th Feb 10 - 17:03
The credit report and credit checking web site Equifax says that more than 1 in 3 of us let credit card debts pile up; a situation that could lead to serious debt problems in the future.
Equifax say this dependence on credit could have serious cost implications on family budgets as 22 per cent of people only make the minimum repayment, while 35 per cent of people are paying off up to 25 per cent of their credit card debts every month. More than one in five people said that debts have increased over the last twelve month.
With 32 per cent of people saying they are further in debt than twelve months ago it is not surprising that credit card repayments are amongst the first to be cut to a minimum as families struggle to cope with monthly budgets.
Neil Munroe, External Affairs Director at Equifax said ‘I don’t think consumers are naïve they know that reducing payments on credit cards is going to cost them in the long-run. But it seems they don’t feel they have much choice.’
The survey of Equifax Personal Solutions customers showed yet more pressure is put on to family finances with 20 per cent of people saying they have lost income because of bonus, overtime or working hour cut backs. At the beginning of 2010 nearly 25 per cent of people said they had not received a pay rise in the last twelve months and 64 per cent of people are not expecting one.
Craig Gedey Marketing Manager at Debt Advisory Line said: ‘Reducing credit card repayments is fine as long as people understand and are comfortable with the affect this will have on the time period over which repayments are made.’
‘However, anyone who is starting to make payments for everyday living expenses on a credit card with no means to pay this debt off every month should seek debt advice immediately.’
‘At debt advisory line we help customers with all manner of debts, from credit card and loan debt to mortgage debts. Over 95 per cent of our customers would recommend their friends and family.’
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