Debt Management - 30 Years of Debt?

Debt in the UK has reached epic proportions and many are opting for debt management plans to resolve their financial woes. Research shows, however, that by only paying the minimum amount on debt can lead to 30 years in the red.

In terms of debt management, there are few worse things you can do than just pay of the minimum amount on your credit cards. Research conducted by uSwitch.com has discovered that by doing this, they are running the risk of being in debt for in excess of 30 years. A debt management plan is a good way for those with multiple debts to restructure their repayments into a manageable amount and can be good for pulling away from spiralling debts.

Debt Management – Credit card trap

The primary reason for the debt crisis that is currently exerting its vice like grip on the UK is an over-reliance on credit and reckless spending by consumers. A debt management plan is a good way for an individual to make their debts more visible and provides a structured plan to repay debts. Most credit cards place a minimum monthly repayment of around 2.6% but by simply paying off this amount, an individual will invariably end up accruing further debt. For those serious about their debt management, paying off their credit cards in full wherever possible is a much more viable option. The research carried out by uSwitch.com discovered if someone had an average credit card debt of £1,812 and repaid their debt at the average of 2% per month it would take them just over 29 years to pay off their debt and they would accrue an interest of just under £3000 during this time.

Debt Management – Lack of understanding

One of the primary reasons that consumers opt to repay only the minimum amount is due to a lack of understanding regarding the consequences. Mike Naylor of uSwitch.com states “Despite the introduction of 'health warnings' on credit card statements, the implications of making the minimum repayment each month are still not clear enough to consumers”. The ramifications of this will see many consumers experience spiralling debts and the real threat of bankruptcy or insolvency. For those who find themselves in this situation, many will opt for a debt management plan in order to get a handle on their finances and to return to a firmer monetary footing.

Speak to Consolidate My Debt about Debt Consolidation

Consolidate My Debt are debt solution experts who offer a range of options to those in financial difficulty. Consolidate My Debt use fully trained debt advisors to ensure they find the right financial solution for you. Financial solutions from individual voluntary arrangements (IVA) to debt consolidation are offered and Consolidate My Debt can consolidate your debt into one affordable monthly payment. To find out more about the IVAs, debt consolidation and other financial solutions on offer from Consolidate My Debt just freephone 0800 158 3654 or email enquiries@consolidatemydebt.co.uk.

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