Debt Management Could Help With Unmanageable Credit Card Debt
on: June 26, 2009, 5:21 am
Author: Think Money
to a new report suggesting that there are more than 200,000 'secret
credit cards' in the UK - cards that are kept hidden from the
holder's partner - financial solutions company Think Money has advised consumers that while
credit cards can be a useful means of funding purchases, borrowers
should be careful to ensure that they can make their repayments
in order to avoid debt problems in the future.
from Halifax Credit Cards showed that people in the UK hide an
estimated 217,000 credit cards from their partners. Reasons for
doing this included buying items the card holder did not want
their partners to know about, hiding existing debt from partners,
or simply having emergency funds available.
to credit card trade association APACS, there are 30.2 million
credit card holders in the UK. Total credit card spending in 2008
was £126.2 billion.
Taylor, Head of Corporate Relations for Think Money, said that
while there is nothing specifically wrong with having a 'secret'
credit card, card holders should ensure they are hiding it for
the right reasons - and not in order to hide problem debts.
boils down to the same principle as having any credit card. Credit
cards can be a very useful source of additional finances, as well
as a 'safety net' against any unexpected costs. Used correctly,
credit cards should not cause the consumer any problems.
it's when the borrower starts delaying their repayments - paying
only the minimum - that the problems can start.
trouble with credit card debt is that the interest is a lot higher
than on many other forms of credit. If the borrower does not repay
the full credit card balance at the end of the month, then the
interest that accumulates on the remaining balance may be a lot
higher than a lower-interest alternative, such as an authorised
time, the interest can begin to 'snowball', and it can become
increasingly difficult to repay the remaining balance. It may
not be long before the debt becomes unmanageable - which is why
it's important to get debt advice at the first sign of difficulty."
Taylor added that the relatively low minimum repayment on credit
cards means that some people can take a long time to clear the
personal loans, which carry fixed regular repayment terms, credit
cards only require a minimum repayment each month. This makes
it very easy to delay repaying the full balance, which is how
problems start for many borrowers.
general, we advise people to avoid making large purchases on credit
cards unless they can be absolutely sure that they can afford
to repay the debt in the near future."
Taylor said that anyone who does find themselves struggling to
repay their credit card debt should not hesitate to seek professional
the interest will only continue to grow, finding the right debt
solution is vital for anyone who can no longer afford to repay
their credit card debt.
such debt solution is a debt management plan,
which is an informal arrangement with the lender that can allow
the borrower to repay their debt at a more manageable pace. It
is often also possible to negotiate a freeze or reduction in interest,
which could be especially helpful for repaying credit card debt.
borrowers should always consider all options available to them.
A professional debt adviser can recommend the best debt solution
for the borrower's individual circumstances."
Resources for editors:
Money homepage: http://www.thinkmoney.com/
Debt page: http://www.thinkmoney.com/debt/
Debt management page: http://www.thinkmoney.com/debt/debt-management/
Contact Details: Melanie Taylor
0845 056 6480
South Langworthy Road