Monday 10th April 2006
As concerns grow that Britons are increasingly getting themselves into greater debt, uSwitch has warned that consumers must manage their credit more efficiently.
According to research highlighted by Cahoot, a subsidiary of Abbey, 50 per cent of people spend more than they earn, with ten per cent doing so every month.
To finance this overspending, people are increasingly using credit cards and loans, yet these can be risky if managed without caution, Cahoots Joe Wiggins argues.
"We live in a culture where people are more prepared to buy what they want, when they want and pay for it later," he said.
"Debt is not necessarily bad, but bad debt is bad."
Nick White, head of personal finance at uSwitch, has warned that not enough people understand the financial implications of simply paying the minimum off credit card balances each month.
"It is accepted that you can borrow money on credit cards and pay it back slowly…[but] if people carry a balance for a longer time it will cost them more," he said.
For those keen to pay off their debt, shopping around for balance transfer deals and interest rates on different credit cards could prove beneficial.
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