Consumers carry over Christmas debt
More than 4.4 million people are still paying for last Christmas, according to research from MoneyExpert.
In addition, the financial comparison site has pointed out that someone carrying a balance of £1,000 at an interest rate of 16.9% will have spent around £169 in interest over the last year. However, research into Christmas debt by MoneyExpert also found 54% of adults either didn’t get into any debt last Christmas or paid it off in a month or less. A further 9% took two to five months to clear their festive debt.
Consumers aged 35 to 44 years old are most likely to still be paying off debt from Christmas 2006, according to the research, with 14% still suffering a financial hangover. Sean Gardner, chief executive of MoneyExpert, highlighted the usefulness of 0% balance transfer deals under these circumstances. He said the average 0% introductory offer on balances transfers lasts 10 months.
“It is not time to cancel Christmas but for millions of us it really is time to cancel some credit cards,” Gardner continued.
“We can all give into temptation at Christmas and put it on plastic but if the debt lingers from year to year you’re starting to get into trouble. Borrowing money is fine as long as you have a repayment plan.
“Unfortunately it appears millions of us do not. And with lenders getting tough that is not a good position to be in. If you’ve not cleared the debts of Christmas past it is time to face up to the future.”