Credit Card definitive information.

Recent research has found that one in three consumers will suffer with credit card debt throughout 2011. Gocompare.com carried out the research and it shows that almost 7% of people will still be paying off Christmas 2010 in June 2011. The level of credit card debt in the UK has now reached £61 Billion.

The 12% of people who have credit cards for bad credit have never thought about switching their provider. This is one way to reduce credit card debt and spending. John Miles, the Business Development Director of Gocompare.com, states:

“Transferring a balance from a card with a high interest rate could be an excellent way to kick start getting rid of your credit card debt for good.”

Of the £61 Billion debt, 70% of them will be building up interest. Only 14% of people are turning to balance transfer deals to ease their debt levels. If you currently have a debt of £3,000 and you switch over to a credit card which offers 18 months interest free, you could save up to £586. This is a huge saving though deals like that are hard to find. In order to gain new customers, Barclays have recently introduced a new 18 month long 0% balance transfer deal. It will no doubt be long before other companies follow suit too.

Around 40% of Britons believe that their debt is set to get even worse over the next six months. This is according to research carried out by R3, a top insolvency trade body. Nearly half of the people questioned by the company also claimed they are worried about their current debt levels. 57% of those people owned a credit card and it was credit cards that generated the most concern. This was shortly followed by 27% worrying about overdrafts and 25% worrying about mortgage repayments.

When speaking about the results of the survey, the President of R3, Steven Law, states:

“Since we last carried out the survey, people have seen a rise in the cost of living, from the VAT increase to the rise of fuel and utility costs. This has happened against a backdrop of pay freezes, pay cuts, and in some cases, redundancies. So it is understandable that many are feeling pessimistic about their financial outlook.”

The debt situation is only likely to get worse as the year progresses. Interest rates are set to increase again and those who have a mortgage worry that if their repayments increase by £100 per month they would not be able to make the repayments. The interest rate would only have to rise around 1.5% for this kind of increase to occur for a homeowner with a £150,000 mortgage.

When speaking about the debt levels, Mr Law states:

“Christmas is a time of heavy spending for many individuals so it perhaps not surprising that the number of people concerned about their debts has increased since last quarter. Many people in Britain are already under pressure due to credit card debts, overdrafts and loans and many have had to rely on these forms of credit to fund Christmas.”