More than two-thirds of Britons have at least one credit card, which isn’t necessarily a bad thing, but it is a concern when you find that the average outstanding credit card debt in the UK currently stands at huge £3,256.

Abbey has found that less than a quarter of the nation’s total credit card debt is currently on a 0% deal, which means Britons are needlessly paying out more than £9 billion pounds in credit card interest each year. The biggest problem with unsecured debt is the rates of interest – if you can barely keep up with the high rates, the chances of reducing your debt is small.

Abbey also found that while 36% of credit card holders have no existing debt or pay off their balance in full each month, more than 40% of people have held their credit card debt for over a year and more than one in five for over four years. The longer you have unsecured debt, the greater the rate of interest the greater the chance of slipping into costly arrears.

Callum Gibson, head of Credit Cards at Abbey, comments: “By transferring an outstanding credit card balance Britons could save an average of £443 a year, a huge cost saving in today’s difficult economic climate.”

One way of transferring the debt is to consolidate it by using the equity in your home. Credit card debt is bad debt because the rates of interest are high and the repercussion when defaulting are harsh. Using the equity in your home means you could reduce your repayments by a huge amount and you will be safe in the knowledge that you only have one debt to worry about.

SOURCE: Abbey, 13/03/09

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

The Council of Mortgage Lenders has predicted that 75,000 people could have their homes repossessed in 2009.

This may seem like something ‘that only happens to other people’, but if you have soaring unsecured debt, you may find that 2009 could be very tough for you indeed.

It is going to get harder to get hold of credit and lenders are going to be more and more strict with repayments as the recession takes hold. If you are unable to meet repayments for many months, and it can happen, you too might face repossession.

Take a look at your debts – how big are they? Can you control them now? How about if the credit card rates rose, or the store cards demanded more payments? It could happen as the banks look for more and more ways to clamber back into the black. If by the end of 2009, your unsecured rates were just a few points higher, would you cope?

And how long could you go if you suffered a loss of earnings? One week or three months? Do you know how much your bills would go up if you missed a few payments? And what would that do to your credit score?

These are tough questions, and hopefully ones you do need to face next year – but to make sure of that, maybe you need to consider consolidation. Debt consolidation can lower monthly bills, improve credit scores and generally make your situation a lot more comfortable – something everyone will be looking to do in 2009.

So talk to a broker today and see if your situation warrants a secured loan as a means of debt consolidation. It could be just the thing to make you recession-proof next year.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

More and more Christmas shoppers are turning away from credit, and instead using cash to pay for their gifts and celebrations.

According to Halifax, 71% of consumers will pay for Christmas this year out of their hard earned cash, while only over a third will use a credit card.

It also found that one in ten will use a store card and only 5% will use a loan to cover the cost of their Christmas spending. The average amount of unsecured debt this Christmas stands at £449.

Mike Regnier, Halifax head of banking says: “It’s encouraging to see that more consumers are becoming prudent with their finances this year by choosing to use their savings, monthly income and cash to pay for their Christmas purchases, rather than opting for costly store cards which could see them paying out more in the long run.”

It’s great news – more people are shying from dangerous, expensive unsecured debt to cover their spending. If you think you need unsecured debt to cover costs, think again. There is nothing worse than unsecured debt to get you further in financial difficulty.

Those who do choose to stack up plastic will only regret it – having to remortgage, use your home’s equity or even face repossession is something no one chooses to do. Thinking that ‘spend now, pay later’ is still a good strategy could be financial suicide as the UK goes into a recession.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

Britons are still waiting far too long to get help with their debts, according to new research from a debt specialist.

Research by Payplan has found on over 100,000 customers has revealed that they are short by a monthly average of £693 on their household expenditure when they seek assistance for their debts.

John Fairhurst, managing director of Payplan, says: “We strongly urge people to get advice on their options as soon as they feel they have a problem. You might be scared to tell your creditors that you are having difficulties, but you shouldn’t be afraid to tell an independent source.

“Prior to the credit crunch, if Britons couldn’t afford their repayments they would often borrow further to pay them off, which clearly just made their situation even worse. Now we are seeing is an increase in calls as people realise that they simply cannot borrow more money.”

Payplan found that Britons wait until they owe more than 50% of their income to creditors before seeking help, and the average unsecured monthly debt repayment is £901.

These statistics just spell out the obvious – without professional advice, debts will get worse. They do not go away, they just keep building up until they get the better of you. But there are options – remortgages, secured loans, IVAs, and mortgage modifications. Of course, the only way to unlock these options is to talk to an adviser as soon as possible.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

If you are thinking of burning plastic this Christmas, try to think of how bad your financial hangover could be in 2009.

Moneyexpert.com has found that the number of people applying for interest-free credit cards surged by more than 15% in November as cash-strapped shoppers rushed to put Christmas on plastic.

Even so, its research also shows 30% of adults are concerned about their ability to manage their personal debt and that 27% of those owing money have gone further into the red in the last three months. This is thanks to 0% cards that allow them to spend, spend, spend before they are hit with hefty repayments later on.

Around 4% – equivalent to nearly 1.8 million people – have increased their debts by more than 20% in just three months, says the website.

Sean Gardner, director of MoneyExpert.com, says: “It can make financial sense to cash in by taking out interest-free cards and then paying them off. But Christmas tends not to be a time for sensible financial planning and the UK economy has been detached from reality for quite a while now.

“The fear must be that people are having one last turn on the credit card merry-go-round before it comes grinding to a halt.”

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

The Government has been criticised for just cutting interest rates and not thinking about those who are already burdened with unsecured debt.

According to fool.co.uk, six out of ten people say another cut in rates will not help. They are already in debt, and their mortgage and their loans may not be affected by any changes to the base rate.

David Kuo, Head of Personal Finance at Fool.co.uk, says: “The 1% cut in rates has brought the cost of borrowing down to levels not seen since World War II. However, it is unclear whom the rate cuts are supposed to benefit – it won’t assist with credit-card and store-card debts.”

It may not. But there is no point waiting to be rescued if you are over-burdened with unsecured debt. There are trillions of pounds of debt owed by Brits, and the Government cannot pay that all off, however good they are.

The only person who can really help you is yourself. You have the ability to use your home’s equity and you are the one who can plan your finances so as to limit debt and start paying off your responsibilities. You are also the one who can pick up the phone and talk to your mortgage adviser.

The base rate might not affect you, but a mortgage adviser can. They can point you in the right direction and help lift some of the burden off your shoulders. It might not be easy and it might take time, but it is better than waiting for a solution to come riding round the corner.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

Even though many are finding that secured loans are severely limited these days, unsecured debt is still luring people into trouble.

Sara-Ann Burgess, director at Burgesses PPI specialists, says many firms are preying on consumers looking for credit and making it very difficult for them to meet repayments because of the huge interest rates they were charging.

“A lot of people think that credit has simply dried up, but this is not the case. Many firms are still lending money, but as competition in the personal loan market has evaporated, the less scrupulous and more expensive providers have begun to gain a foothold,” said Burgess.

According to Burgess, a lot of firms were advertising to consumers and offering them access to fast, easy credit without the need for a credit score.

It might be easier to take the simple route of signing up for yet another credit card, but easy isn’t always best. Credit cards will only make your credit score worse and will only leave you with more unmanageable debt in the long run.

If you need funding, talk to an adviser. Secured debt like second-charge loans and mortgages are hard to come by, but they are worth the work and the effort. A secured loan can actively improve your credit score, while giving you some much-needed finance.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

The Government yesterday pledged a 60-day reprieve for all those facing unsecured credit card arrears.

It called on credit card companies to cut interest rates and to establish a new ‘statement of best practice’. Ministers says they want to ensure the 1.5 per cent base rate cut announced by the Bank of England earlier this month is reflected in interest rates on credit cards.

Brad King, managing director of Compareandsave.com says: “With the current economic climate, individuals need to be thinking responsibly about their borrowing and how and when they plan to pay back the debt. That said, there is some practical advice which can help consumers get the best possible deal for their situation.”

If you are facing unsecured debt issues, the 60 days will give you time to explore all your options. Credit card must be extinguished as soon as possible – the high rates and high risk make them a credit score nightmare.

One option is secured finance. Using your home’s equity to consolidate debt is the best way of ridding yourself of the unhelpful credit card debt and allowing you a lower-cost loan that won’t break he bank every month.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.