People who live alone are more likely to get into credit card debt
13th June 2011
It is thought that single people who live on their own are more likely to get into debt than anyone else. Research was conducted by Bright Grey, and it found that 17% of adults who live alone overspend. Many people, who do overspend, do so through the use of credit cards. They try to make their lives more comfortable and enjoyable and it leads to credit card debt.“
The proposition Director at Bright Grey, Roger Edwards, states:
“There is a real concern that for many people high mortgage and rental prices can mean that spending choices are limited. Yet more worryingly, it seems that the average salary is far too short for some, who just can’t help but overspend in order to maintain their existing lifestyle or to make ends meet.”
Around 35% of those that were questioned admitted that they spend more than they actually have. Another 24% of people claim that they do so because they like their lifestyle. It is single people who live in shared accommodation who are the most likely to overspend. Around 40% of people admit to doing this.
It is thought that there are around 10 million adults relying upon high interest credit cards and loans in the UK to fund their lifestyles. Mr Edwards continues to warn consumers:
“While it is tough to live alone in the current financial climate, it is imperative to not get yourself into a position of having to fund your overspending for many years to come.”
Uswitch.com has also predicted that energy bills will rise by £630 million this year alone. This is something else that will contribute to consumers turning to their credit cards. If consumers are currently struggling with energy bills then it may be advisable to switch to a meter. Water meters in particular can be really useful.
It has recently been announced that the average water bill will be increased by 4.6%. This will take it to around £356 per year. The changes are set to take place in April. A water meter for example, could save an average family up to £56 per year. This might not sound like a lot but you would be surprised how much that can actually help.
As credit card debt can quickly get out of hand, consumers are urged to pay off their debts as soon as they are able to. The head of consumer finance with the site lovemoney.com, Ed Bowsher, has stated:
“If you have a serious debt problem, I’d firmly advise you to pay down your debt rather than save. You’ll get a poor return on your savings at the moment, so it makes sense to pay down your debt. Then when interest rates rise, you’ll be paying less interest because your debt is smaller.”
Many consumers think that it is a better option to save some of their salary rather than to put it towards paying their debts. However, it is a much better idea to pay off existing debts using the money that you would have saved.