Are Credit Card Debt Problems Set to Worsen?
Get Free Debt Help to Tackle Financial Problems
Dec 14, 2008
Figures produced by the Bank of England show that credit card debt amounts to £53.1 billion. This figure is 250% higher than figures a decade earlier. The problem has worsened because of spiraling costs of living and increased difficulty in getting personal loans during the credit crunch.
According to MoneyExpert.com in a recent Daily Telegraph article "An extra 250,000 people aged between 25 and 34 are still trying to clear their credit cards from last Christmas, compared to the number who were a year earlier."
Is Credit Card Debt Set to Worsen?
As retailers continue to struggle, increasing numbers are enticing customers into spending more on their credit cards through sales. PriceWaterhouseCoopers stated that 80 of the top 100 stores were holding sales of some sort.
The Importance of Seeking Debt Help
Seeking professional, impartial debt help is fundamental to turning credit card problems around. Qualified counsellors can help identify ways to save money. They also help their clients to become debt free via one of a number of different solutions.
Potential Debt Solutions to Financial problems
- Debt Management Plan. This allows a person with financial problems to put all unsecured finance under one roof and make a single, affordable payment each month. The money is then apportioned to creditors on a pro rata basis. A 15% fee is normally charged for managing the Debt Management Plan.
- Consolidation loans. It is possible to consolidate all finance under a single loan, increase the term of the loan and reduce monthly outgoings thus making life more affordable.
- Individual Voluntary Arrangement. This allows a borrower to pay a pre-agreed amount to an Insolvency Practitioner for 60 months and the remainder is written off. It is a solution to serious money problems only and should not be considered to tackle liabilities for under £15,000.
- Personal bankruptcy. It is possible wipe credit card debt through personal bankruptcy, although doing so costs £475. It is not suitable for home owners.
Wipe Credit Card Debt - All Agreements Prior to 6th April 2007
The Consumer Credit Act 1974 has a requirement that all credit agreements must comply with specific implied terms. This means that if the agreement doesn't state the rate of interest, how many payments should be made etc the credit card agreement may not be enforceable.
If the credit card agreement was established prior to 6th April 2007, check that it is legal. There are a number of private companies offering this service. Should it not be possible right-off the balance, seek financial counselling and choose from a range of solutions. Becoming debt free is a reality, but only if action is taken now.
Those that found this article useful may also be interested in finding out ways to reduce credit card balances.
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