70 working days needed to pay off average debt interest, survey claims
March 11, 2008 by admin
Filed under News, News-Credit-Cards
People who borrow money using personal loans and credit cards need to work for an average of 70 days per year just to pay off the interest their borrowing accrues. 
That is according to Unbiased.co.uk, which has proclaimed March 10 “Debt Freedom Day” to draw attention to amount of money consumers are having to pay just to service their debts – let alone pay them off.
Last year’s Debt Freedom Day fell on February 1, and this year’s date reflects the dramatically increased amount of unsecured borrowing British consumers are taking out.
Although credit card borrowing has fallen slightly from last year £55.6 billion to £54.9 billion from 2006 to 2007, the value of personal loans taken out has risen to £9.8 billion from £2.6 billion last year.
Combined with the effect of the credit crunch – which has pushed up the rates of interest charged on personal loans by an average of 0.5 per cent in the last year – debt and interest have soared.
Unbiased chief executive David Elms warned: “While Debt Freedom Day is of course a hypothetical point in the financial calendar, people should pay attention to it. In the current economic client is has never been more important for people to realise just how much it costs to service their debts and to ensure they have adequate funds available to do so.”
