- 30
- Jan
The Debt Counsellors Annual UK Debt Survey, has turned the focus from unsecured loans to store card debt and credit cards as the prominent factors causing debt problems in UK households.
The combined of transactions made on charge, credit, debit and store cards is expected to grow to £639 billion in 2010, according to Credit Action. Currently, more than 41 per cent of UK adults who need help dealing with their debt problems owe money on store cards, while credit card debt is a major factor in 91 per cent of cases.
The unregulated interest rates on store cards have a devastating effect on household finances. Store card debt is relevant in January as consumers are hit with the results of Christmas shopping. Research from Alliance & Leicester Personal Loans reveals that 23 per cent of people used store cards for Christmas spending. The problem arises because they are not using the cards for convenience, but to spend money they do not currently have.
John Porter, senior counsellor with the Debt Counsellors, said:
“Store cards can be tempting because of free gift incentives or offers of discounts. It is fine to take advantage of these but the balance must be paid off immediately, otherwise excessive interest fees will be incurred.
“In fact, the best advice is to avoid store cards altogether, because store card debt can mount up very quickly due to the high interest rates and it is best to keep temptation at bay.”
Porter adds: “Anyone worried about their store card debt, or any other kind of personal debt problems, should get professional debt counselling. The Debt Counsellors provide free, confidential debt advice.”
