Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Debt Fears for UK Consumers who rely on Credit

Personal_Finance / Debt & Loans Dec 14, 2015 - 11:58 AM GMT

By: MoneyFacts

Personal_Finance

Consumers are living on the edge by relying too heavily on credit and failing to put aside sufficient savings, according to a recent survey*. Moneyfacts.co.uk warns that those who don’t plan their repayments or, in the worst case scenario, lose their main source of income, could therefore find themselves living in fear of their debts as their credit spirals out of control.


The research found that three-quarters of consumers who fall into debt rely on credit cards and overdrafts, or borrow from family members, to keep on top of their spending. However, these are only short-term coping mechanisms.

According to calculations by Moneyfacts.co.uk, an authorised overdraft carrying a £1 daily usage fee would mean that borrowing £100 for 15 days would incur a monthly charge of £15, or £180 a year. This is more expensive than taking out cash on a credit card charging 25.89% pa, which would cost only £2 a month or £24 a year in interest.

This illustrates that borrowers need not rely on their overdrafts to keep up with payments – other options, such as a credit cards with an interest-free deal or a competitive personal loan, could be far more cost-effective.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“Building up a safety net is key to ensuring that credit isn’t used as a short-term funding solution. For those without savings, credit can be a useful stopgap, but this can easily turn into unmanageable debt, inciting fear among millions of borrowers.

“Consumers who rely on credit to manage their outgoings each month could be making their lives even harder by turning to some of the most expensive sources of credit, such as overdrafts, high interest credit cards or payday loans. However, applying for a competitive unsecured personal loan or searching for an interest-free credit card can be far more cost-effective and less financially burdensome. Borrowers should therefore think carefully about their borrowing options and search the market for the best deals.

“To avoid falling into a spiral of debt, borrowers should take the time to run a credit report as part of a regular financial health check and review their debts regularly. This way, they may be able to avoid trouble before it’s too late.”

*StepChange’s latest figures. Released 10 December 2015.

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in