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Credit card debt leaves families in a 22-year struggle

David Cameron this week revealed that the average consumer in Britain choosing to pay off their debts through the minimum monthly payments, could be locked into their repayments for the next 22 years.

The Prime Minister expressed concern at the economic state of Britain, adding that many families had become too reliant on credit cards and store cards, amassing huge debts that would continue to plague them for years to come. Figures from Moneynet.co.uk show that a consumer with a credit card bill of just ?2000, making the minimum monthly repayments, will build up a further ?2,275 in interest over the 22 years that it takes them to pay the bill in full.

According to figures from the Bank of England, consumers have racked up a ?57bn bill from credit cards. High interest rates and complex credit deals mean that many families are unaware of the dangers of credit card debt and, once they begin relying on plastic in order to keep up with their day-to-day finances it becomes an almost impossible to break free from the debt cycle.

Global credit card companies are actively drawing British consumers into this cycle, marketing perfectly packaged credit card deals as the answer to any and all financial problems. Having enticed the public with the offer of dream deals and 0% interest for the first x months, you will find that the banks become much less accommodating when the burden of bills becomes too much to handle and it is then that people find themselves becoming tied in to unbelievably high repayment rates and endless credit card debts.

Mr Cameron spoke about Britain breaking free from the "debt crisis" and he urged the UK public to begin taking better care of their finances, emphasising the importance of paying off any outstanding debts.

In this time of economic hardship, it seems that the majority of the British public are in need of a tight budgeting plan that will enable them to keep strict control over their spending. Our answer to this? Cash, of course.

Sound too simple? Well, the beauty of this budgeting genius is in its simplicity - don't allow yourself to spend money that you don't have. Rid yourself of the temptation of overdrafts and seemingly simple credit cards and go back to basics with a cash budget, allowing yourself to keep a close eye on your weekly spending by setting easy-to-follow cash budgets.

Protect yourself from becoming locked into the debt crisis, and take this warning as an opportunity to move away from any credit cards or store cards that might seem like the perfect payment plan now, but which are sure to cause endless repayment hassle later on. 

Friday, 7th October 2011

Tags:   david cameron  /  government  /  bank of england  /  debt  /  credit cards  /  conservatives
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