Debt day arrives for credit card spenders
A consumer campaigner has warned that with the imminent arrival of ‘debt day’ – the day where the first statements and bills start to arrive for credit card holder that have been flexing the plastic over the Christmas and New Year period – it is vital that consumers start thinking about how they intend to repay the debt before it spirals out of control with interest charges being added to balances that are not repaid in full and have no interest free period.
 The founder of moneysavingexpert.com, Martin Lewis stated that it was important for consumers to think ahead about the repayment of their credit card bills, with many consumers having clocked up balances of thousands of pounds over the Christmas and New Year period. With minimum repayments it could take years to pay off the debt, and is also likely to cost you a fortune in interest, with most of the minimum monthly repayment getting swallowed up in interest rather than being applied to the principle balance.
Mr Lewis stated: "Why is this Debt Day? December is the time people run up debt and now people are trying to work out what to do – the panic is beginning to set in. The important thing to remember is banks and lenders are there to make money out of you and not to make debt cheaper. There is a systemic problem in the UK with debt. We have a nation educated into debt when we go to university but never educated about debt. The vast majority of the UK population is debt illiterate."
Mr Lewis added that one way of trying to tackle credit card debts was to switch to another credit card, such as a balance transfer credit card that offers a low rate of interest for the life of the transferred balance. Alternative, if consumers feel that they can repay the balance fairly quickly, it may be worth transferring the balance to a 0% balance transfer fee to ‘buy’ a little extra time to pay off the debt without added interest charges.
Alisdair Milton
15th January 2007
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