CREDIT CARDS

Low Incomes Causes Bad Debt Problems

New research highlights the problem of low incomes, as three quarters who were recommended to declare bankruptcy earned less than average wage.

The findings from the Consumer Credit Counselling Service (CCCS) Debt Dashboard for quarter four 2010, reviewed the profiles of those who were advised bankruptcy as the only solution to their unsecured debt problems.

On average it takes 43 years for a bankruptcy client to repay their debts, with the average debt of a bankruptcy client with CCCS standing at £31,000, although one in five owe more than £40,000 in unsecured debt.

“Overtime bans, wage caps and forced shorter working hours are limiting the ability to maximise income,” said Delroy Corinaldi, CCCS External Affairs Director.

“As limited income is one of the key factors determining a bankruptcy recommendation so there is likely to be a further rise this year.”

Over half of people who are made bankrupt are over the age of 40, with almost one in ten over 60 years old.

This older age group earn £7,000 less than the UK national average of £25,900.  The review revealed many who face bankruptcy are forced to sell their home, or rent it out as 70 percent have done.

Credit Card Debt

Credit card debt is a common burden for many Brits, often mounting into a serious debt problem, with high interest rates making it harder if not impossible for adults to pay it off.

Moneysupermarket revealed this interest is costing Brits £2.3 billion, with almost half of all credit card users accumulating this interest as they do not pay off their bills in full.

The study also showed the average debt was held on a credit card for up to 10 months before it is completely paid off in full, meaning a substantial amount of interest would have accumulated.

Tags: bad credit credit cards, bank account, BANK ACCOUNTS, bank cards, basic bank accounts, best credit cards for bad credit history, best credit cards for bad credit rating, Card One Banking, Cashplus, compare credit cards, compare prepaid cards online, compare prepaid cards uk, Guaranteed bank accounts, low interest credit cards, MBNA, pay as you go prepaid cards, prepaid credit cards, prepaid debit cards, prepaid money cards, prepay cards, TRAVEL MONEY CARDS, travel money cards offer alternative to using debit cards abroad