People in debt are turning to their credit cards according to survey

According to a recent study by R3, the Association of Business Recovery Professionals, almost four million people are failing to keep up payments on regular household bills and are having to turn to credit cards to tide them over instead. More than three million of these admitted to taking on more debt in the last three months as they found it harder and harder to make ends meet.

Steven Law, the President of R3, was reported in an article, which appeared in The Telegraph on 2nd December, as saying: “I see many people who are concerned about their credit card debts as, worryingly, they rely on them for day to day purchases. Unfortunately, I fear that the number of people worrying about their levels of credit card debt is set to grow.”

These figures paint a grave picture for UK consumers who appear to be struggling more than ever before to prevent themselves succumbing to debt problems. According to the R3 report, those falling further and further into debt rarely make it past the nineteenth day of the month before running out of money. This is one day earlier than six months ago.

Mr. Law went on to say, “Making credit card payments and spending on non-essential items remain the key reasons why people struggle to pay day” and this study suggested that over thirty per cent of people fear that their money worries will increase during the forthcoming six months, seven per cent higher than the amount of people who thought that last quarter.

Given the high levels of personal stress and family difficulties, that are associated with debt problems, these statistics make for a worrying read. A quarter of the total population now appear to be worried about debt management problems. Things are worst in the West Midlands where half of those interviewed for the survey admitted to money worries.

For those facing debt problems, the most important thing to do is to try and stay calm. Formulating a sensible debt management plan for how to stop debt mounting and then begin to reduce, is the key to escaping the debt burden.

First and foremost, it is essential to have a really clear idea of each month’s income and expenditure. Without knowing what is coming in and going out, it is impossible to budget effectively and prevent mounting credit card balances.

Once you know your current spending pattern, it is time to see where cuts can be made. Realistically, most people who are facing debt management problems will need to tighten their belts in one area or another. For some, saving money could be easier than expected. There are a wealth of websites dedicated to saving consumers money on everyday items ranging from financial products, to gas and electricity, right through to vouchers to save money on your weekly grocery shop.

Visit www.moneysupermarket.com and use their comparison facility to see if you could save money by switching insurance providers. www.moneysavingexpert.com can provide the full low down on utility suppliers and offers advice on when is a good time to switch gas or electricity supplier. With many utility companies offering offers to entice new customers, you might even qualify for a cash back payment that will help further with your debt management problems.

Whilst you are focusing on your finances, it is a good idea to see if you could cut debt repayments by taking a debt consolidation loan or switching to a new loan or credit card with a more competitive rate. The rates you qualify for will depend, to a large extent, on your existing credit rating so if you have already fallen behind with repayments you may not be eligible for some of the best deals. If this is the case then applying for more deals and being refused, could make your credit rating worse so consider the likelihood of being accepted before you apply.

If you have a decent credit rating but are only just managing to meet monthly repayments, applying for a new loan or transferring the balance on your credit card to a better offer could buy you some much needed breathing space from debt management problems, just be sure to read the small print and don’t be taken in by superb initial deals that turn sour after six months or a year. If something looks too good to be true, sadly, it often is.

Once you have saved as much as you can by re-organising your finances, turn your eyes to household bills. Grocery shopping is often a large portion of the weekly expense, so see if there are ways to cut down your spending by buying from cheaper supermarkets or searching online in advance for voucher codes. Cooking meals in large batches and freezing them for later use is another cost effective solution. Not only does it cut down on wastage and allow you to buy in bulk more cheaply, it also means that you will have meals on standby for when you don’t have time, or can’t be bothered to cook. Heating something up from the freezer will prevent you paying for costly ready meals or take-aways instead.

Other great ideas to make small weekly savings are: taking sandwiches to work instead of paying for a meal from the canteen, cycling or walking to work if possible to save on transport or petrol costs, staying in and watching a film or reading a book rather than going out to a restaurant or the cinema and generally looking for the cheapest deals for everything you spend.

If you have already cut down as much as possible and still find yourself struggling, it may be time to call in some outside help. No-one need be alone with their debt problems and even talking to someone from your local Citizens Advice Bureau might help you think more clearly about your options.

Whatever your situation and how ever bad your debt management problems may be, the most important thing to remember is that taking some action, however small, is better than burying your head in the sand. Ignoring debts will only encourage them to increase and with them, the payments that you are struggling to meet. Most companies will be willing to make individual arrangements for you to pay off your debts rather than see you default, but to start working your way towards a debt free future means taking action to control your finances right now.

Source: expressandstar.com