Recent research has shown that people are cutting back on using plastic, in order to reduce the size of their credit card debt.
According to figures from Tescocompare.com, more that a third of all individuals that are trying to spend less on credit, are doing so in order to shrink the overall size of their debt.
Since the start of the current financial meltdown, there has been record number of people with chronic debt problems, more often than not with out of control credit card debt as the major factor. For these individuals, simply reducing spending on the cards will not make the problem go away, and in increasing cases, more drastic action is required.
With a Debt Management Plan, monthly repayments on credit cards can be reduced to a more affordable level, and consolidated into a single payment. Furthermore, interest and charges on the cards can be stopped.
Reducing debts was not the only reason why people are ditching the plastic. One quarter of those people that were surveyed said that they wanted to increase their savings, whilst 18% of respondents said that they simply wanted to be less reliant upon credit in the future.
Surprisingly, the survey revealed that around one third of us have no intention of reducing our credit card spending, at all. Nearly 5 million people saw an increase in their total outstanding credit card debt, over the last 6 months, and this is despite the fact that we are currently in the worst recession in living memory.
Some financial commentators see this “live for today” mentality as a potential future problem, with many individuals falling into financial difficulty when they are unable to keep up with their repayments. Consumers that are unable to control their credit card spending could benefit from debt management advice and assistance if they become overcommitted.