Post-Christmas Credit Card Bills Place Millions Under Pressure

According to figures provided by the Bank of England, loans and credit card bills amounted to £1.5 billion in November 2015, signalling the largest surge seen in borrowing in the run-up to Christmas since 2006. Its chief economist, Andy Haldane, commented that while the economy is recovering, lending through unsecured personal loans and credit cards is also beginning to rise fast.

Post-Christmas Credit Card Bills Place Millions Under Pressure

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New Year Financial Blues

A survey by the free advice service National Debtline, which is run by the Money Advice Trust charity, found that just under one in eight Britons think that they could well fall behind with their finances in January because of the amount they spent on Christmas. This statistic represents an estimated 5.7 million people. 2.5 million of these said that they would probably seek advice on how to manage their debts and finances as a result of their spending in the run-up to Christmas. This is a significant increase on last year, when the figure stood at 1.9 million.

Tackling Debt

For many, the squeeze after Christmas compounds existing financial troubles. The number of people concerned about their finances who are contacting the service’s website as early as Boxing Day is increasing each year. In a climate where house prices keep climbing, and where landlords are facing tax changes on their buy-to-let commitments, essentials such as food, clothing and heating are being cut back to pay mortgages and rents. Research conducted by the housing charity Shelter showed that over a quarter of parents with children under the age of 18 have already taken these measures.

Help and advice on how to overcome debt is plentiful, as are the various methods to do so. It’s important, however, that each individual chooses the method that best suits their situation. Whether it’s through a simple review of income and outgoings or restructuring existing debts to bring interest payments down, as long as the debt is being chipped away, it’s good.

More drastic measures, such as an Individual Voluntary Arrangement from companies such as Carringtondean, allows for the debt to be partially written off, provided that there is agreement given by all the lenders concerned.

However, the pros and cons of going down this route should be weighed up carefully, as they should with any other financial decision.

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