Credit Card News Debt Mountain More Of A Molehill 2997142
Debt mountain more of a molehill
04 June 2004
Pollsters MORI have found that recent estimates of credit card debt may be too high. This is because most pay off their balance at the end of every month.
Earlier this year the Bank of England warned that people across the UK owe £50 billion on credit cards. However, the new report suggests that real credit card debt may be half this level.
According to the new report seven in ten people use their cards and pay off their balance every month.
The report claims that of those that do not pay off the balance each month, half use their cards only for emergencies or for large purchases. These people apparently also pay off their debts as quickly as they can.
Andy Thwaites who worked on the research explained: “It is apparent that the majority of credit card holders are using their cards sensibly and are in a position to pay them off.”
“Naturally we can never underestimate the serious nature of people running up huge debts on credit cards that they can’t possibly afford to pay off, but we are only seeing this trend amongst a minority of card users.”
The study categorised credit card users, with only six per cent of people apparently falling into two problem groups. Most of these were classified as having spiralling debt relative to their incomes, although this need not mean they had trouble paying their credit card bills.
When home ownership and other assets are considered it appears that just one per cent of credit card users are unable to manage their credit cards.