Debt management company Debt Options weigh in on consumer credit card woes.
(1888PressRelease) June 23, 2011 - Credit Action released figures this month showing the true extent of the UK's personal debt. Data up to May 2011 showed the average household hold debt stands at £55,870 including mortgages. According to the Government's own budget from March 2011, that figure will almost double to £106,486 in 5 years time. Debt management experts are warning that the UK's debt problems are far from over.
Across the UK, the total amount owed by individuals was £1,453 billion by March this year. The total amount of personal credit the nation undertook was still rising during the previous 12 months, increasing by an annual 1.1%. A fresh £0.5 billion worth of new credit was agreed in the same month, 80% of which was secured lending. The extent of debt problems is reflected in the £24.88 million worth of individual loans the banks wrote off every day from October to December the previous year. In the meantime, the UK's interest repayments for personal debt were estimated at a staggering £65.5 billion in the 12 months up to this March.
The average debt per household without including mortgages stood at £8,144. However, in real terms, when averaged across each household who actually have unsecured credit agreements, that figure balloons to £15,661. Including mortgages, averaging the total debt across each UK adult would mean each one owes just under £30,000 - or 128% of the average salary.
"The Government's March budget predicted personal indebtedness is will substantially increase within five years. Given the current figures, we are expecting more enquiries for debt solutions during the same period," said a spokesman from debt management experts Debt Options.
Consumers also now owe more for credit cards, car finance and store cards/credit deals. By March 2011 there was an average of £4,350 'owed' for every single UK adult. And if official estimates prevail, this figure could well substantially increase. The Government's Office for Budget Responsibility has issued a stark prediction that by the close of 2015, the average household debt will stand at just over £84,000. Rising costs of living may account for what some debt management experts are calling 'survival debt' using credit cards. Consumers pay everyday bills using credit cards and then struggle to keep up with repayments.
"We have had a lot of enquiries from people needing credit card help. Cards can seem to have a good introductory rate but often it only applies if certain conditions are met. The card then turns out to be far more expensive. Or it's difficult when there's still a balance to clear when the offer ends. Changes in circumstances like redundancy or reduced hours are particularly difficult. Some begin paying regular bills with cards until the limit's reached, without any further income to then meet bills and repayments. Some have already reached that point, and then struggle when their circumstances change. Genuine credit card help will simply focus on legal debt solutions. There are no magic 'debt wipe outs', but there is always a manageable debt solution to get their finances back under control".
Anyone needing credit card help or support for any other type of debt can contact the Debt Options team of debt management advisors on freephone 0800 234 3605 or visit http://www.debtoptions.co.uk/.
Debt management company Debt Options weigh in on consumer credit card woes. 
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