Credit Card Debt Rockets with a Third of Christmas Shoppers in Debt

Precision Claims responds to a new report by You Gov which suggests British consumers are facing a new debt crisis after 40% of customers used their credit cards over the festive period with many having no realistic chance of repaying quickly.

According to recent news reports, British consumers are facing a new year debt crisis with 40% of people using their credit cards to pay for Christmas gifts, food shopping and rent or mortgage despite having no realistic chance of repaying quickly.

The additional pressures of winter bills, rent and January sales on top of outstanding Christmas debts has now forced many consumers to rely on plastic over the coming weeks.

Experts estimate that Christmas and New Year sales spending has sent a third of shoppers into debt, with around two thirds spending more than average on credit cards, according to a recent study by You Gov.

The post Christmas sales alone saw a record £4.3 billion spent in just two days, renewing fears of an increase in personal debt. Experts believe that hundreds of thousands of people across the UK have entered 2012 with the burden of excess debts. They estimate the majority of debts will take as long as six months before they are paid off and one in ten of us will still have debts still looming next Christmas.

You Gov believe around 12 million people will now have to rely on their credit card just to pay for everyday essentials throughout January. This is an increase of 2% compared to 2011 figures as high living costs takes its toll on the nation.

What's even more concerning is that many people believe they are protected if they are unable to repay their debt through payment protection insurance (PPI). However this sort of protection is often sold as an extra and in most cases is unnecessary and expensive.

Simon Thompson, Managing Director at Precision Claims stated, "PPI cover is often very limited and in most cases won't protect the majority of those who fail to pay their debts back on time, leading to further problems for those with high interest rates."

PPI was wrongly sold to hundreds of thousands of unsuspecting customers who could have never claimed on the policy, even though they were charged for the insurance. Now the banks responsible have been forced to set aside £7 billion to meet PPI claims.

Thompson added "If you believe you have been wrongly sold PPI insurance when applying for a credit card, we advise you speak to a claims specialist who will be able to help you reclaim compensation."

Precision Claims is a dedicated PPI claims management company specialising in recovering compensation for consumers who were wrongfully sold payment protection insurance.. For more information contact Precision Claims today on 0844 704 1945 or visit www.precisionclaims.co.uk.