Credit and store cards fuelling debt problems

According to a debt counselling service in the UK, a huge number of UK consumers that have been seeking debt management advice and financial assistance from counselling services have found themselves in financial dire straits as the result of spiralling credit and store card debts rather than loans and other forms of finance. Credit cards and store cards have become well known because of the extortionate interest rates that consumers can incur if the balance is not cleared in full upon receipt of the statement, and it seems that many have now fallen victim to these extortionate charges, which have made it increasingly difficult for struggling borrowers to keep on top of their debts.

The recent survey that was carried out into the UK's serious debt problem, also indicated that although credit cards were the main factor in many cases store cards accounted for many of the problems being experienced by those seeking help, and particularly at this time of year when many have been tempted into taking out high interest rate store cards to fund spending sprees in the January sales, and are only now realizing the high cost of doing this.

Store cards charge extremely high interest rates on balances that have not been cleared in full within the specified period, and this is what can lead to consumers losing control of their finances. Over forty percent of those seeking assistance with their finances have owed money on store cards according to the Debt Counsellors Annual UK Debt Survey. One counsellor stated: "Store cards can be tempting because of free gift incentives or offers of discounts. It is fine to take advantage of these but the balance must be paid off immediately, otherwise excessive interest fees will be incurred. In fact, the best advice is to avoid store cards altogether, because store card debt can mount up very quickly due to the high interest rates and it is best to keep temptation at bay."