UK Consumers Still Paying Last Christmas Credit Card Debt

Around a staggering 4.2m UK consumers are still paying credit card debt accrued from last Christmas, according to new research.

With the UK’s credit card epidemic on the rise, it’s of no surprise that many who used their credit cards to help fund last festive season’s shopping are still struggling to clear the debts they built up.

According to figures Moneyexpert, the average UK consumer took till March 2006 to clear their credit card debt from Christmas 2005.

Moneyexpert chief executive, Sean Gardner said: “ Christmas is a time for giving our credit cards a battering over the festive season.

“ It is tempting to put spending on your plastic when it comes to Christmas and the bills are mounting up. Of course everybody intends to clear the debts as soon as possible but it is evident that millions of us don’t.”

He added: “ With more than four million of us still paying for last Christmas it is clear that there is a need for many of us to change our financial habits.

“ Getting into debt is fine as long as you have the means to get out of it.”

Figures released by Moneyfacts reveal that one in eight UK credit card holders is till to pay off credit card debt accrued from Christmas 2005. Many of these will likely use their cards again this Christmas despite not clearing last years credit card bills, leading to further financial misery and pressure further down the line.

An estimated £11.4billion will be spent on credit cards this festive season with many spending more than they can afford leaving themselves open to accruing further debt to the interest rates charged by their credit card companies.

A consumer who spent £1,000 last Christmas on their credit card for example, will have paid around £169 in interest over the last year at an APR of 16.9%.

Savvy credit card users will look to transfer their balance soon after the Christmas period to a credit card that offers a 12-months interest free balance transfer deal, thus avoiding paying interest on the card’s debt. Credit card providers such as Barclaycard, Citibank or Virgin credit card currently offer such deals.

Whilst switching credit cards as soon as debt on it has accrued will ensure up to months of interest-free debt, an initial fee of on average £20 will be levied to carry out the transfer. Still cheaper than paying over £100 in interest for those who don’t anticipating paying off their card debt in the near future.

Alisdair Milton
6th December 2006

More Information:

• Get The Most Out of Credit Cards This Christmas
  With Christmas just around the corner, many consumers in the UK will see their wallets feel the strain of Christmas shopping. With many already overspending, one way to relieve the financial pressure over the festive season is to see what credit and store cards in the marketplace can save you money and offer rewards for those spending sprees.
• Causes and Cures Of Credit Card Debt
  For some, credit cards can prove a temptation too far, and soon they find themselves in debt. Simple precautions will keep the savvy card holder from such dangers.
• Tips On How British Women Can Climb Out Of Their Growing Credit Card Debt
  More women in the UK are spending money on credit cards than at any other time. In percentage terms, there are now more British women spending more each month than they earn.
  

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