July 7, 2005

A government survey, has come up with the notion that most of the British public, couldn’t care less when it comes to managing their debts and feel that they don’t have a problem, when it comes to making their payments at the end of each month, even though there has been a marked increase in consumer borrowing over the last few years.

The age group with the biggest debts, seem to be the 20-30’s who have children, live in rented accommodation and are living in the low income bracket (under £10,000 a year) and are exactly the people who borrowers have been systematically inundating with guarantees of credit, that they can not afford in the first place, leaving these people in serious trouble when they realise that they can not pay the debt back.

It has got to the stage that almost a tenth of us spend more than half of our income, in repaying credit card bills, with 8% spending more than a quarter of what they earn on their credit card debt, all of this has led to the increase in people getting into difficulty when it comes to paying the bills at all, with an overall total of 4% of the credit card borrowers now in arrears in their payments, of over three months behind. With many others struggling to come to terms with the amount of debt that they find themselves with.

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The MORI survey found that peoples preferred choice of credit was the credit card, with a total of 19% of credit card holders not paying off their in full at the end of each month, with over drafts next on the list for popular choice of unsecured borrowing, though by borrowing this way seems to be the cheaper option for most, as the consumer now owes less with these forms of borrowing, than other methods.

These other debts include hire purchase car finance, building society loans, as well as personal loans and loans that have come from their families or friends.

The way that we can access credit has made it so much easier to get our hands on it no matter your financial situation and with any consumers treating debt as an easy access to the things that they want and with it feeling to them like free money that they only have to pay back bit by bit, will soon leave them looking in to the abyss that’s debt, which can ultimately led to bankruptcy.

Credit cards are handy maybe even too handy some say and if used in the correct manner they can work for you and in some cases actually make you money if you have a cash back card, that you pay off in full at the end of each month.