Credit card debt ‘set to soar’

The level of UK credit card debt is set for a major surge, a new survey has suggested.

January 2012 will be a month when over a third of credit car…

The level of UK credit card debt is set for a major surge, a new survey has suggested.

January 2012 will be a month when over a third of credit card holders (36 per cent) will rely on plastic to make everyday purchases, according to the Post Office Consumer Credit Report.

It found over two million people will spend more on their cards this month than they did in January 2011 and 38 per cent will raise their monthly outlay by as much as an extra £200.

Such a trend could add considerably to the level of UK credit card debt, not least if it is carried out by those who already owe a lot of money on their cards and are therefore set to be faced with a soaring interest bill, rather than having any imminent prospect of clearing the balance.

The poll found 21 per cent of people agreed that they will need to budget more carefully in 2012 to cope with their debts, while six per cent said they expect they will get into deep trouble because of the amount they owe.

Post Office head of credit cards Az Alibhai remarked: "Whilst it is good to see so many people intending to manage their credit card purchases and repayments sensibly, there are still too many people who aren't thinking of the consequences."

Debt management plans may assist those who have got into such difficulties through overspending.

Spokeswoman from Moneyfacts.co.uk Rachel Springall warned last week that UK consumers should be "aware" of how much interest they may have piled up through using credit for their Christmas shopping.

Posted by Paul Thacker

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