Credit card debts soaring amongst pensioners

It has been reported recently that credit card debt amongst pensioners has been soaring, with struggling pensioners sitting on £1.1 billion worth of credit card debt. Financial problems amongst many pensioners have increased as a result of soaring inflation coupled with minimal rates of interest being paid on their life savings.

Figures were released recently by Gfk NOP and showed that pensioners were no spending a fortune collectively on their credit cards each month, with pensioners’ credit card spending values rising by 20 percent since the start of this year. June saw pensioners spend an average of £354 each on their credit cards. The last time this level of spending was reached was at the height of the credit crunch in October 2008.

The total outstanding debt level for June amongst credit card pensioners was £1.1 billion, and this reflect an increase from £900 million from six months earlier. With many pensioners being hit with the rise in the cost of living coupled with the drop in savings interest rates many have had to turn to their credit cards to fund their essential spending, and this has seen the level of credit card debt rocket amongst older people. Many also have additional debts to deal with such as loans and finance, and a recent survey showed that one fifth of those aged fifty five and over still had a mortgage to pay off.

Joanna Parsley, a spokesperson for the consumer group Credit Action, said that older people were in a very vulnerable position, stating: ‘The growing indebtedness of older people is scary. We are talking about a generation who are particularly vulnerable as the income from their savings has been devastated.’

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Nationwide pleased about BIS decision

The credit card industry in the UK has been at the centre of a major crackdown recently, with government officials and regulators looking at ways to make things fairer for the consumer when it comes to credit card repayments. Recent proposals from the government were put forward to the Department for Business Innovation and Skills, and amongst the various suggestions that were put forward was an important issue relating to the allocation of repayments. Read more

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Some cardholders could spend more than a lifetime paying their credit card debt

Concerns have been expressed recently that some credit card holders who are customers of the credit card giant Barclaycard could end up spending more than their lifetime trying to repay their credit card balance, after the credit card company announced that it was planning to reduce the minimum level of repayment that it was asking from its customers each month. Read more

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Many people putting their overdraft debt onto their credit cards

It has been claimed that many people are now turning to credit cards to get rid of their overdraft debt, with many putting their costly overdraft debt onto low interest or interest free credit cards in order to try and save some money on interest. Read more

Tags: overdraft debt, debt charity, loan, free credit cards, interest charges, credit card debt, 0 balance transfers, Credit Cards

Consumers advised to pay credit card debt and not save

In the current economic and financial climate, with the recession threatening the jobs of many people, it is not surprising that many people decide to put every spare penny into savings in the event that they should find themselves short of cash or experience a drop in income. Read more

Tags: Credit Cards, Stoozing, interest rates, fact, base, credit card debt, savings account, savings

Consumer wasting money by failing to switch credit cards

It has been reported that many consumers in the UK are simply wasting their money and paying far more than they need to on their borrowing, simply because they haven’t taken the time or made the effort to switch their credit card to a more suitable and affordable one. Read more

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Debt management firms warned by government

Officials from the government have been warning debt management firms to stop misleading consumers with regards to getting their debts written off. Read more

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“Shop around online” for discounts, advises expert

A personal finance writer has advised consumers to avoid spontaneous shopping trips and impulse buys, instead saying people should “try and shop around online” to find the best discounts on a range of products.

With more people finding themselves in financial difficulty as a result of the global credit crunch, Cliff D’Arcy says they should use the internet to find bargains and “get more bang for [their] bucks”.

The comments follow research from Monolink, which found that British consumers aged between 16 to 34 years old are struggling to pay off their credit card debts as they try to keep up with their friends and lead a fashionable lifestyle.

According to the survey, 14 per cent of respondents have bought clothes on a credit card which they are still trying to clear and 13 per cent have bought a car when they still have debt on their credit card.

Shopping online can result in discounts of between 30 and 50 per cent, says Mr D’Arcy.

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Millions wasted on credit card debt payments

Brits are squandering millions every year on unnecessary interest payments on their credit cards, despite also saving money for the future.

Recent research by Fool.co.uk has found that around one in every six people with an average of £450 pounds worth of credit card debt are simultaneously saving £3,000 for a “rainy day”.

British cardholders pay an average of £165 annually on interest, with an outstanding balance of £1,100 at 15 per cent. Meanwhile they are earning just £66 interest on savings accounts at six per cent.

David Kuo, head of personal finance at Fool.co.uk, commented: “We are often told to put aside money for a rainy day because having a ready source of funds for emergencies is a sensible thing to do – and it is.

“[However], saving money before you have paid off your debts is like trying to fill a bath without putting the plug in first. It’s a pointless exercise that results in a waste of water, an empty bath and hefty water bills.”

Those aged between 34 and 41 are the most likely to be saving at the same time as paying hefty interest on credit card debts.

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