CREDIT CARDS

February debt statistics revealed

The nation is falling faster into debt as the latest UK debts statistics have been released. 

According to debt charity, Credit Action, the average household debt (including mortgages) for December was a staggering £55,823. This has increased from November when it stood at £55,818. 

However, despite the typical season of Christmas spending, personal debt levels fell compared to November’s figures.

The average amount owned per UK adult including mortgages was £29,547 in December, which is around 122% of the average earnings. 

The high cost of living is taking its toll on the nation as many of them have turned to credit cards and loans for financial aid. 

The figures show that the average consumer borrowing including credit cards, motor and retail finances, overdrafts and unsecured loans was a staggering £4,207 per UK adult in December. 

Taking on such high levels of debt could easily result in bankruptcy. Credit Action found that 331 people are declared insolvent or bankrupt everyday in the UK, which is the equivalent to 1 person every 60 seconds during each working day. 

In November last year, 26.2 million credit card purchases were made everyday with Brits spending a total of £1.252 billion. 

Credit card spending V unarranged overdrafts 

Turning to your credit card can sometimes be more cost effective than relying on your unarranged overdraft. It has been reported that some banks are charging almost 20%.  

This is the highest rate since records began in 1995. The Bank of England claimed that customers are being charged an average of 19.47%, 

pushing millions towards a high risk of debt. 

For example, if you were overdrawn by £1,000 a year, the charges would amount to £200 in interest before other charges applied, such as dipping further into the red. 

In comparison, there are many credit cards available that offer a much better rate.

Tags: best credit cards for debt, Credit Action, credit card purchases, UK debts statistics