Christmas debts ‘must be cleared’

Britons have been warned that they must clear their debts amassed over the Christmas period as interest rates look set to increase.

However, research from moneysupermarket.com has found that 31 per cent do not intend to pay the balance of their credit cards within the next six months, a fact that concerns the price comparison site’s credit cards expert Peter Harrison.

“With interest rates rising on many cards, minimum repayments often only barely cover the interest accrued on the debt,” he said, adding that borrowers do not want to still be covering the costs of Christmas 2009 when the holiday season comes around again next year.

The study also revealed that those aged between 20 and 29 are the least worried about resolving their debts, while only 26 per cent meet the full balance on their cards each time.

Last month, it emerged that the government intends to better regulate the credit industry to protect consumers. It suggested increases in the minimum monthly repayment levels to help people pay their debts off quicker.

By Sarah Adie