Signs of Interest Issues Abound

Posted 2008-01-3

Are you peering out from behind the curtain, fearing the arrival of the postman? If so, you are not the only one. A recent USwitch study reported that 25% of 16-44 year olds were sweating the arrival of their January credit card bill. Why the heat under the collar? Half of those USwitch surveyed had no idea how much money they spent over the holidays.

Signs of trouble brewing in the credit and debt arenas are strikingly apparent; USwitch reports that 25% of adults surveyed find their debt unmanageable, and 9.5 million people have reached their spending limit allowed on at least one form of credit.

This report is backed by figures that show British interest repayments increased by £12.7 billion to a record high of £93 billion a year. In addition, USwitch reports that the average annual interest bill per household is up by £517 from last year, now topping £3,744.

The increase in annual interest could be a result of a rise in interest rates on their mortgage payments. This is only one aspect of the problems Britons are facing. At the same time, credit card companies are becoming much stricter in their lending practices; a reported 38% of people who applied for a credit card were rejected. 

Commenting upon the staggering results of the company’s study, Mike Naylor of USwitch warned that those with large debts need to be proactive in protecting themselves. He believes that although the recent reduction in interest rates is beneficial and a step in the right direction, it may be too little, too late for many people.

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