Credit card debt affects millions of UK citizens every year. The statistics for credit card debt show that debt is becoming an increasingly prevalent problem for many of us, especially since the recession has resulted in an increased cost for both staple and luxury goods.In 2010 there were approximately 80 million credit and debit cards in circulation throughout Britain. Out of these cards almost 70% had some form of outstanding payment owed on them. In 2010 one out of every twelve households in London were forced to pay their rents or mortgages via credit card. Nationwide this figure was 6% with more than a million people paying mortgages and rent with credit cards. At the close of 2010 over 65 billion pounds remained outstanding on credit card debts.Looking at the daily figures for UK debt we can see just how prevalent and insipid debt problems really are. These figures reveal how we Britons regularly take credit for granted and show the terrible consequences this has for our financial stability. Britons pay 178 million pounds in personal interest every day whilst banks write off 20.1 million pounds of unpaid debts in the same period. On average an adult in the UK will have almost 30,000 pounds worth of debt which is over 120% of average yearly earnings. On average a household’s debt is 8,480 of personal debt (excluding mortgages). The total figures for UK personal debt are greater than the nation’s gross product per year. The average UK consumer borrowed 4,390 pounds on credit cards in 2010 – for car payment programs, personal loans and overdrafts. Over four million people missed a monthly credit card debt payment in 2010.
These shocking figures really do show how many of us rely on credit card debt to see us through our lives, but they don’t reveal the terrible consequences this kind of laissez-faire attitude culminates in. Regrettably, with so many people unable to pay off their debt, the UK sees a huge number of bankruptcies and repossessions every day. In fact on average one home in the UK gets repossessed every 15 minutes and an individual is declared bankrupt or insolvent every 3.9 minutes.So you can see that credit card debt is a huge problem for our financial security as individuals and as a nation. What these figures also clearly show is that if you are struggling with credit card debt you can rest assured that you are not alone. Further, the problem people face with credit cards are not always due to their own negligence. Granted in an ideal world you should pay your credit cards off every month so as to avoid unnecessary charges but sometimes chance occurrences or events prevent you from being able to pay back on time. Many people are unaware of just how much their APR (annual percentage rate) is for their credit cards and are shocked when they discover their monthly bill. This is due to the fact that credit card rates have remained obstinately high, despite Bank of England efforts to place limitations and caps on APR’s. Coupled with the reams of clauses and sub-clauses that credit card policies always contain, it is no wonder that people can quickly end up in a downward spiral of unpaid debt. So the first thing you should ensure when facing credit card debt is to avoid blaming yourself or others around you, regrettably in life these things happen.
The first thing you should do if you find yourself in credit card debt is to contact the credit card company directly. Inform them of your situation and ascertain what options they offer. Most credit card companies will offer you some kind of payment scheme to cover your debt. This will allow you to pay off your debt without accumulating so much interest that payment becomes untenable. This is because it is more beneficial for credit card companies to receive slightly less money but to guarantee that they do receive some. Often in these situations people’s debt will spiral out of control and they will have part of/ if not all of their debt written off – either through renegotiation by a third party or by declaring insolvency or bankruptcy. So from credit card companies’ viewpoints, it is better to receive some money rather than none. However sometimes it is already too late for these options or you have accumulated a spread of debts across many credit cards. In this situation you should still remain calm. Don’t instantly rush out and get more credit to pay off your debt or take out another loan to cover the first. At this stage you really need to seek professional advice, such as that which you can find here. There are a plethora of companies out there who can help you resolve your credit card debt issues, as well as a large number of government initiatives to help you get back to financial normality. You simply need to ascertain your situation and then decide which options are the best for you. 90% of Credit card debt relief programs will let you avoid bankruptcy or insolvency and there are numerous steps you can take, following your debt relief, to improve your credit rating again.
You can find information on all of the credit card debt settlement/relief options on this site but briefly your key options are: a debt management plan – where your credit card debt is managed for you, usually by a third party company; a which in combination with a debt management plan lets you write off at least some of your debt; a credit consolidation loan that lets you take out one loan to cover all of your others, giving you time to get back to financial stability; and finally the government sponsored Individual Voluntary Arrangement Program – which can clear up to 75% of your credit card debt over a 60month period,Or in scotland the equivalent a Trust Deed. Whichever solution you end up choosing, make sure you carefully read the terms and conditions and have a full grasp of when you will be back to financial stability and free of your credit card debt.
