Many still paying off loans and credit cards from last Christmas
November 30, 2010
Industry officials have said that many people in the UK are still paying off their credit card and loan debts from last Christmas, but many are planning once again to borrow for Christmas spending again this year, despite already being in debt. For people that still owe money from last Christmas and who then take out a loan or credit card for this year could find themselves facing spiralling debt issues.
Nearly two and a half million people are said to be still repaying their debt from last Christmas, and many therefore do not have any available cash to pay for this Christmas. It is thought that a large number of people will be relying on credit again this year to help pay for things like Christmas gifts, entertainment, clothing, and going out, and this will leave many with a financial hangover when January comes around.
It is thought that many people will be paying for Christmas this year by borrowing money, and according to research around 55 percent plan to borrow on credit cards to pay for this Christmas whilst around 3 percent are planning to try and take out a loan in order to fund the cost of Christmas. Roughly 25 percent of consumers in the UK are hoping to be able to cover the cost of Christmas by using their savings.
An official from ConsumerIntelligence.com said: “Christmas is only one day in the year but the financial effects appear to last all year for a substantial number of adults. Around 14% of adults got into debt as a result of Christmas spending last year and many are still paying for that. Using a credit card for Christmas spending makes perfect sense as long as you have a repayment plan and are not just running up debts which you will not clear.”
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