Saturday 12th of December 2009
Over a quarter of borrowers are dependent on credit cards, a new report has found, although an individual voluntary arrangement (IVA) could get them out of this situation.
The Office of Fair Trading also discovered that 19 per cent of people need store cards just to get themselves through the economic downturn, but such reliance could spell a debt disaster.
If you find yourself regularly armed with plastic to cover everyday costs, then you may decide to cut up the credit and store cards and try and get yourself in a position where you can tackle purchases on your own, rather than relying on your lender.
An IVA can merge store and credit card debts together and freeze interest to help you stop playing catch-up with repayments.
You could find that an IVA also answers any problems you have had with lenders contacting you to demand their money back. All communication is usually done through a financial expert and lenders are advised to leave you alone if you meet your monthly repayments.
Commenting on credit card addiction, Frances Walker, head of media and public affairs at the Consumer Credit Counselling Service, says only planned purchases should be placed on plastic.
By Hayley Jones
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- Do you cover your living costs with store and credit cards?
