Brits Debts Comprised Largely of Loans and Credit Cards

Fri, 19 Mar 2010

Credit cards and personal loans are the two major sources of the debt of British borrowers, the Consumer Credit Counselling Service (CCCS) has confirmed. The new figures have revealed that credit card debt accounts for 46.3 per cent of consumers overall debt, while personal loans account for 39 per cent of debts.

The CCCS is a charity set up to help borrowers solve debt problems, working with them to arrange repayment or write-off plans for people who can’t afford to repay their debts. At present, there are 100,000 debt management plans in place, though a considerable number of debtors continue to approach the Service. The average person who seeks help from the CCCS has total unsecured borrowings of £29,000, and is in their mid-30s.

Annual review figures from the CCCS have revealed that one in three people who seek help do not qualify for debt management plans or Individual Voluntary Arrangements . It is feared that those borrowers who do not qualify for such help will turn to more expensive forms of credit with higher interest rates such as payday loans, misusing the short term credit option for a longer term solution.
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