Millions of Brits Have Outstanding Balances on Credit Cards For More Than A Year

Nov. 18, 2010 - PRLog -- The recession has undoubtedly affected us all in some way over the last few years. With living costs skyrocketing and tax going up, many of us find ourselves using credit cards to finance our daily expenditure.

But when balances are left to mount up, and budgets don’t stretch to pay more than the minimum repayment, debts can spiral and result in a ‘vicious cycle’ of debt that seems impossible to escape from.

New research revealed that more than 6 million U.K citizens have had an outstanding balance on their credit card for 12 months or longer. This equates to over 10% of the population. Over six million Brits have had an outstanding balance on their credit card for a year or more, according to research from moneysupermarket.com.

The statistics, released by moneysupermarket.com showed that a huge 41% of all credit card users have an unpaid debt on their card for more than a year. Of these, 14% admitted that the debt had been there for more than 5 years.

Added to this, one in ten credit card users find themselves unable to pay more than the minimum repayment amount every month. This is the equivalent of more than 3 million British citizens, who are dicing with debt and may find themselves in a financial hole in the near future.

Financial experts have called this a ‘dangerous trap for consumers to fall into’, as while it may seem like minimal borrowing, the actual amount they have to pay back is significantly more than they spent originally.

For example, it would take someone paying back the monthly minimum repayment on £2,000 borrowed at an average 18.13 per cent APR, 34 years to repay the debt. Shockingly, the amount of interest they would pay back on this debt would be £2,226. This amounts to more than double the sum of money that was borrowed! A very high price to pay for convenient spending!

Among U.K credit card holders, the average length of time it takes a customer to repay credit card debt is 21 months. This is incredibly worrying, as people are clearly not managing their expenses properly. Whether it is down to poor money management or just ignorance of how credit card repayments work, the citizens of Britain need to put some serious thought into the way they are spending money and their ability to repay their debts.

More and more people are being stung by high interest rates and late payment charges in the wake of the recession, which has left many people struggling to meet their financial commitments.

If you feel you are struggling with credit card, loan or store card debt, help is at hand in the form of a Debt Management Plan.

Sterling Green offers a debt management plan that enables you pay off your creditors at a reduced monthly rate, with interest and charges frozen. This means you can relax knowing the balances on your debts are coming down.

For more information contact Sterling Green PLC, on 0800 083 2827.

Contact Details:
Sterling Green
Sixth Floor
Portland Tower
53 Portland Street
Manchester M1 3LD

E-mail: Enquiries@sterlinggreen.co.uk
Website: http://www.sterlinggreen.co.uk/
Tel:0161 237 0440
Fax:  0161 237 0499

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Sterling Green is a financial management company commited to providing solutions to help with a variety of debt problems.