Overspending Bursts Credit Bubble

Posted 2008-01-3

A quarter of 16 to 44-year olds are scared about their bills arriving in the New Year, according to a study by uSwitch.

The survey, backed by the Financial Services Authority (FSA) also revealed over half of people had no idea what they spent in the run-up to Christmas.

Stats also say Britons could end up struggling to cope with the rising cost of their debts, with research suggesting interest repayments in Britain have rocketed by £12.7 billion to a record high of £93 billion a year.

Experts are warning the ‘credit boom’ experienced in Britain in recent years is almost certainly ending as lenders tighten their practices.

uSwitch has also discovered almost a quarter of adults say they are finding debts unmanageable, and 9.5 million people have reached their limit on one form of credit in the last 6 months.

Credit card rejections are also on the rise, with 38% of those who applied for one in the last 6 months turned down.

Many households are under pressure after a rise in interest rates, causing higher mortgage repayments. uSwitch estimates the average annual interest bill per home, including mortgages, is now £3,744, up £517 in 12 months

Only 13% of those surveyed said they would make an effort to get their finances in order.

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