Debt Councillors Issue Warning Over Spiralling Debts
With this Christmas in the UK set for millions of pounds of increased expenditure on the high street, debt councillors are urging consumers to use their credit cards and unsecured personal loans responsibly.
With towns such as Crewe and Nantwhich experiencing soaring levels of personal debt, the Citizens Advice Bureau for the area has warned of the consequences of spraling personal debt.
Paul Nichols, manager of Crewe and Nantwich Citizens Advice Bureau, said: “ Helping people with their debts has always been an important aspect of CAB work, but the demand has definitely increased during the last year.
“ The number of debt enquiries at our Crewe and Natwhich offices during the period April to October was 42% up on the same period last year. Personal loans and credit cards continue to be the most common types of debt, but we have also noticed a significant increase in the number of clients struggling with secured loans.
“ People with money problems are tempted to consolidate their debts in a single loan, secured to their home. Unfortunately, this can later place them at risk of losing their home. There are other solutions, and we would urge people to take advice before committing themselves to a loan that bring with it the risk of homelessness.”
The UK’s rise in debt and bankruptcies prompted a response from South Cheshire MP Stephen O’Brien who lent his support to a new national campaign to tackle record levels of personal debt.
With consumer debt, including credit cards and personal loans, reaching £1.2 trillion and with more credit cards in the UK than citizens, Mr O’Brien commented: “ An increasing number of people are getting into financial difficulties as their debt soars, causing themselves and their families great distress.
“ The recent interest rate rises, which have increased mortgage costs – coupled with rising unemployment, energy bills and taxes, mean that household budgets are under massive pressure.
“ The number of personal bankruptcies is soaring, as is the number of people asking the Citizens Advice Bureau and other debt counseling services, for help with their debt problems. Tackling personal debt and financial exclusion is an issue of social responsibility.”
Many credit card holders are now taking advantage of the ever-popular credit cards that offer low rates of interest for the lifetime of the balance. With rates as low as 6% they make financial sense for those who don’t envisage paying off their credit card debt within 6 months or longer and will result in them paying substantially less interest than if the debt were left on a standard card that levies a higher rate of interest.
Alisdair Milton
10th December 2006
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