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Christmas debt hangover on the cards for nine in ten

  • Nearly nine in ten people with credit card debt (87%) will suffer a festive financial hangover – carrying an average debt of £2,400 into the New Year

  • Nearly half (47%) think they will still be paying it off when the tinsel comes out again next year

  • More than two thirds (67%) are concerned about their level of debt – one in 10 (10%) are extremely worried

  • Consumers should take charge of their finances now – switching financial products and home service providers could save people over £1,000

  • com urges those worried about their debt to contact charities such as StepChange Debt Charity or the Money Advice Service.

Nearly nine in ten Brits (87%) starting the New Year in the red on their credit card, face an average debt of £2,400 , according to new research from Uswitch.com, the price comparison and switching service.

The debt of Christmas past will be haunting consumers well into the New Year. On average, those struggling with debts think they will take 17 months to clear them. Nearly half (47%) expect to still be paying off this year’s festive debt when next Christmas rolls around and 6% say they can’t ever imagine being debt free.

With over a quarter (27%) considering going into debt in order to afford Christmas presents for friends and family this year, it is no surprise that one in 10 (10%) expect to start the New Year more reliant on their credit card than before the festive period.

Over two thirds (67%) are concerned about their level of debt in the New Year and one in 10 (10%) feel extremely worried. With this in mind, it’s important for people to know that they are not alone and there are steps they can take to lessen the burden. This can include getting some breathing space by moving existing debts to a card that charges 0% interest on balance transfers. Shifting the average debt of £2,400 to a 0% balance transfer card could save people £380 over the course of a year in interest fees alone – even after paying an average transfer fee. Furthermore, consumers could be £1,125 better off in one year by switching their home services and financial products with Uswitch.com.

For anyone looking for more advice on how to deal with debt, charities such as StepChange Debt Charity and Money Advice Service can help.

Nicolas Frankcom, money expert at Uswitch.com, says: “At this time of the year, money worries are weighing heavily on a lot of people’s minds. Overspending during the festive period will leave many with a financial hangover, but they cannot afford to stick their head in the sand. By taking a quick look at their finances, consumers could save a considerable amount of money – and start taking steps to get back into the black.

“Balance transfer cards with an interest-free period could be a lifeline for those needing some breathing space from debt. Those looking to transfer should do their research to find the right card by looking carefully at any transfer fees, not just the length of the 0% offer. It’s not just card debt though, shopping around for the best deals on things like energy, broadband, insurance and mobile phone tariffs could help consumers save over £1,000.

“If you can’t see a way out of your current level of debt there is help out there. Contact StepChange Debt Charity or the Money Advice Service for free and impartial advice to get your debt under control.”

Find out how you could save over £1,000 a year with Uswitch here.

FOR MORE INFORMATION

Ailene Barr

Phone: 020 3872 5610

Email: ailene.barr@uswitch.com

Twitter: @uswitchPR

Notes to editors

Research carried out online with the Uswitch.com Consumer Opinion Panel in November 2015 amongst a sample of 3,898 GB adults

  1. When asked ‘How long do you think it will take you to pay all your debt off in full?’ 87.1% of those with debt on their card already and/or debt from Christmas answered with a value over two months. 46.8% answered with over 12 months. Average amount of time to clear debt is 17.0 months. 5.7% say they can’t ever imagine being debt free.

  2. Of those who have credit card debt, when asked ‘How much debt do you currently have on your different types of credit card(s)?’ and ‘Thinking of all of your Christmas spending, how much of this do you think you will put on the following types of credit card?’ the average amount was £2,437.94.

  3. When asked ‘Which of the following statements best describe how you feel in general about your level of debt?’ Not at all worried = 32.7%, Slightly worried = 42.0%, Significantly worried = 15.0%, Extremely worried = 9.6% Don’t know = 0.7%. 42+15+9.6 = 66.6%

  4. See here: http://www.uswitch.com/faqs/savings-messages/ for more information

  5. Will you consider going into debt in order to afford buying Christmas presents for friends and family this year? Yes, I would be too embarrassed not to buy presents = 6.2%, Yes, I f eel obliged to = 4.9%, Yes, I never pay off my credit card bill anyway = 1.6%, Yes, I will just cut back in the New Year = 7.4%, Yes, I enjoy spending money on friends and family at Christmas = 7.3%, No I would rather borrow money off friends or family = 4.3%, No, I wouldn’t bother buying presents if I couldn’t afford it = 4%. Total yes = 27.4%

  6. Do you expect to start the New Year more reliant on your credit card than before the festive period? Yes, definitely for the first couple of months of the year = 6.3%. Yes, I expect I’ll be more reliant throughout the whole of next year = 3.2%. No, I expect to be less reliant = 19.3%. No, I expect I’ll use my card(s) the same = 62.1%. Don’t know = 9.1%. Total ‘Yes’ excluding ‘Don’t know’ = 10.4%.

  7. Annual saving of £382.51. Based on a credit debt of £2,4373.94 on the average interest rate of 17.95% (source: Bank of England) transferred onto a 0% interest balance transfer card with the average transfer fee of 1.53% (source: Uswitch balance transfer card table). Correct as of 21st December 2015.

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Uswitch is the UK’s top comparison website for home services switching. Launched in September 2000, we help consumers save money on their gas, electricity, broadband, mobile, TV, and financial services products and get more of what matters to them. Last year we saved consumers over £373 million on their energy bills alone.

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