Christmas Spending To Send 1 in 3 Britons Into Debt
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One in three Britons will fall into debt while buying Christmas presents for their friends and relatives this holiday season, according to survey results published by research and consulting company YouGov on Monday.
The survey, which was commissioned by payment technology firm Intelligent Environments, discovered that nearly 31 percent of UK respondents would use overdrafts, credit cards and personal loans in order to do their Christmas shopping. Of these, 58 percent are expected to use their credit cards to fund their purchases.
One in three Britons will fall into debt while buying Christmas presents for their friends and relatives this holiday season, according to survey results published by research and consulting company YouGov on Monday.
The survey, which was commissioned by payment technology firm Intelligent Environments, discovered that nearly 31 percent of UK respondents would use overdrafts, credit cards and personal loans in order to do their Christmas shopping. Of these, 58 percent are expected to use their credit cards to fund their purchases.
[quote]“Christmas is typically a cash-strapped time of the year but as harsher economic conditions start to bite, the number of people falling into debt or behind on their payments looks set to rise,” said Jerry Mulle, the sales and marketing director at Intelligent Environments, as quoted by the Financial Times.[/quote]The research found that those aged between 25-34 were struggling the most with their finances, with 64 percent of this age-group facing debts or arrears of some kind, not including mortgages.
44 percent of the country were also already in debt, with nearly 26 percent of UK citizens are now going overdrawn at least once a month.
[quote]”People are really seeing their household incomes stretched,” said Delroy Corinaldi, from the Consumer Credit Counselling Service, to Sky. “We would say to them: ‘Think twice before spending on things you can ill-afford, do not go into the red on credit cards and make sure it’s not something you will not find you are struggling with come 2012.’”[/quote]Last week, a Financial Times investigation revealed how rising consumer price inflation, coupled with the weakened job scene and the reluctance of high street banks to lend to low-income UK borrowers, had created fertile conditions for “payday lenders” to exploit.
Roughly 4 million Britons have taken out such loans, which can carry interest charges of up to 5,000 per cent per year.
Related: The Raw Deal: Personal Loans
According to Mulle, financial institutions “have a duty to help customers better manage their finances and make it easier for them to repay their debts.”
Online and mobile services, such as a text message or an email alert for the individual consumer’s spending, would also help them from going into the red.
“As the uptake of smartphones and tablets continues to grow, interactions across digital platforms have become the norm,” said Mulle, as quoted by WalesOnline. “As a result, online and mobile channels are becoming increasingly relevant to consumers struggling with debt by providing them with the convenience and privacy they desire to manage their arrears.”
