Member Article

1 in 7 adults in Yorkshire and the Humber have had an outstanding credit card balance for at least six months

One-in-seven (15%) adults in Yorkshire and the Humber have had an outstanding credit card balance for at least six months, including the 2% of adults in the region who have had an outstanding balance for five years or more, according to a survey of over 2,000 British adults by insolvency trade body R3.

Although worrying, the level of this type of debt in Yorkshire and the Humber is lower than the Britain-wide figure which saw 22% of British adults with an outstanding credit card debt for at least six months, of whom 4% have had an outstanding balance for more than five years.

The research, part of a long-running survey of Britain’s personal finances by R3 and ComRes, also found that, of the 33% of adults in Yorkshire and the Humber are worried about their current level of debt, 50% are worried because of their credit card debt – by far the most common cause of concern of the types of debt tested.

Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, commented: “With low interest rates, lengthy interest-free periods, and a poor period of real wage growth, credit cards have become a necessary crutch for some households.

“The problem is that credit card debt can be so easy to accumulate. Contactless payments and automatic minimum repayments can make it easy to lose track of spending and the total amount owed. Recent figures show that the average UK household spent £900 more than it received in income across 2017.

“When taking on any new debt, including a credit card, it’s very important to have a plan for how to repay it. Taking on more debt or continually putting off repayments is not the answer and will only make existing financial situations worse. Credit cards aren’t a long-term solution for serious financial difficulties.”

The research also shows that, of the 36% of adults in Yorkshire and the Humber who say they often or sometimes struggle to make it to payday, 25% say they struggle because of making credit card repayments.

Eleanor Temple adds: “The recent rise in the Bank of England’s base rate underlines that borrowers can’t assume that the current low interest rates that many enjoy will be around forever..

“While credit cards can be a quick fix for financial problems, they can store up problems for later. It’s really important that anyone worried about their debt, or struggling with their finances, speaks to a qualified and regulated expert about their options.”

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The research also found that:

• 33% of adults in Yorkshire and the Humber say they are at least fairly worried about their current level of debt – a fall from the two previous surveys in August (43%) and February 2017 (40%). • Credit card debt remains by far the most frequently reported cause for concern among adults in the region who say they are at least fairly worried about their current level of debt, with half (50%) saying it worries them (a rise since the 43% who said the same in August 2017).

• 19% of adults in Yorkshire and the Humber say they do not have any savings at all at the moment (compared to 23% in August 2017 and 19% in February 2017).

• 36% of adults in the region say they often or sometimes struggle to make it to payday, down from 41% in August 2017.

This was posted in Bdaily's Members' News section by Emma Kilmurray .