Unsecured personal debt can creep up on you. Outstanding credit card balances, a little on a couple of store cards, the odd unsecured loan and even your overdraft facility on your current account; it’s amazing how much debt we can simply take for granted, as a constant feature of our lives. You may feel that this debt is manageable, that you have greater financial problems than those that tick along relatively unobtrusively in the background, but it’s frightening how quickly these background debts can become serious concerns.
Recent studies have found that 1 in every 10 people in the UK is permanently overdrawn, with another 12% using their overdraft facility at least 5 times in the year and almost half of the population using it at least once. As bleak as this sounds though, it’s actually an improvement on the same time last year, when it was almost 2 in every 10 that were permanently in the red and over half depended on their overdraft at least once in the year.
At least we’re moving in the right direction. As personal finance has been such a hot topic for so long now, it’s perhaps only natural that individuals in the UK have taken advantage of the emergency rate of interest to pay off as much of their outstanding debt as they can. It’s great that fewer people rely on their overdrafts but the number of people who are permanently in their overdraft is still too high. Were they to find themselves faced with an unforeseen expenditure or emergency outgoing, this safety net may have already been used up. Also, should their circumstances change and they were to lose their source of income and means of paying off this debt, it can become a serious debt problem.
As inflation is rising, individuals will find it increasingly difficult to get themselves out of their overdrafts if they are used to living off them. Likewise, we could well see more and more people being drawn into this way of life, depending more and more on their overdraft to pay for ordinary expenditures, rather than saving it for emergencies. So, not only are we set to be hit with a sustained cost of living increase, research suggests that banks will also increase rates of interest on their customers overdraft facility.
For impartial advice on clearing your unsecured debt, from a dedicated debt advisor, visit www.harringtonbrooks.co.uk . Harrington Brooks are one of the longest established and most respected financial solutions institutions in the UK. Their professional advisors are on hand to offer debt help to those facing financial problems.
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