17% of people still paying off Christmas 2011

Some 17 per cent of Britons are still dealing with a financial hangover from Christmas 2011.

New research from uSwitch.com has found that many cons…

Some 17 per cent of Britons are still dealing with a financial hangover from Christmas 2011.

New research from uSwitch.com has found that many consumers are paying off debts they have built up over 12 months ago. Indeed, 19 per cent of people admitted they are starting the new year with credit card debts of over £5,000.

More than 50 per cent of those questioned think it will taken them a year to clear the money they owe, while 15 per cent require a three-year repayment plan and seven per cent cannot see it ever being sorted.

Anyone struggling to get by because their arrears are building up should check out a debt management plan. The informal restructuring solution offers people a way out of a financial mess, as it reduces monthly repayments and freezes any further interest charges.

Michael Ossei, personal finance expert at uSwitch.com, said: "It's easy to get carried away at Christmas and merrily put everything on plastic, but there comes a time when people have to wake up and smell the coffee.

"Credit cards can be a practical and cost-effective way to shop – but only if you can clear your full balance at the end of the month."

He added store cards can see individuals incur even harsher charges, with interest rates climbing as high as 30 per cent. The expert stated people should avoid using credit cards as a means of managing their money.

Nearly two-thirds of consumers (59 per cent) admitted buying some of their Christmas presents using a credit card and so these people should take steps to reduce the size of their bill sooner rather than later.

Despite their money worries, ten per cent said they spent over £1,000 on Christmas in 2012, but these consumers need to make sure they do not bury their heads in the sand when it comes to taking control of their situation.

By Joe White

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