Brits ‘struggle to clear credit card debts’

Britons are failing to clear the debt they have on their credit cards, newly-released research has found.

It was carried out by moneysupermarket.com and discovered 41 per cent of those questioned have an outstanding balance on their card for a year or more. Some 14 per cent admitted they have been unable to wipe their arrears out for over five years.

A total of nine per cent of respondents said they only pay the minimum amount on their credit cards, which means it will take much longer and cost them more in the long term.

The comparison website observed individuals who choose to repay in this way are getting into a “dangerous trap”. It added the average length of time it takes to settle the balance of a credit card is currently 21 months.

Kevin Mountford, head of banking at moneysupermarket.com, remarked the findings have highlighted how many people are still relying on their plastic to survive. If this situation is to continue, people may end up needing debt consolidation methods to sort out their finances.

“Credit cards are not designed for long-term lending and anyone with an outstanding balance on their card should consider switching to a product offering zero per cent interest on balance transfers, allowing them to pay back the debt without incurring any further interest charges,” Mr Mountford stated.

He added it is vital consumers are aware of the implication of continually borrowing in this way.

This ties in with research from Scottish Provident which reported that 4 million brits would be able to survive for less than 6 months if their finances changes for the worse.

John Miles, business development director at Gocompare.com, recently noted Brits have cut down on “frothier spending” as they seek to reduce their overall outgoings.

Posted by Joe White