Britons Facing Financial Crisis

by : Phil

Research from price comparison website has revealed that more than 3 million people in the UK are trying to manage their finances using five or more credit cards.

Thirty per cent of Britons applied for a new card during 2007 - 2008 and despite the growing concerns of the global credit crunch, consumers have carried on spending money far beyond what they can afford, leaving them facing crippling debts.

The report concluded that people are now in 'real financial trouble' as they try to make mortgage repayments on time and minimum payments on other outstanding arrears.

Chief executive at, Sean Gardner said, "There has to be real concern if people are using cards to keep their head above water. It is entirely healthy if people are swapping debts from one card to another, taking advantage of 0 per cent deals to ensure that they pay as little interest as possible. But anyone who is trying to juggle five or more credit cards and owes money on all of them is in real trouble."

People between the ages of 35 and 44 were found to be the worst offenders for owning multiple cards, with nearly one in ten people in this age group admitting to having five or more credit cards. Many of these people who were in a relationship and had children admitted their finances would reach 'breaking point' if one of the adults had to give up work to look after the family.???

Experts are urging borrowers to get their debts under control after signs that major banks are beginning a series of clamp downs on their credit lending.????

Egg had already contacted 161,000 customers they deemed to be at 'risk', with a warning that their cards would be frozen, whilst other banks, including Barclaycard claim to have refused almost 50 per cent of applicants for their new loans during 2008.

Meanwhile the Debt Advice Agency has warned that the number of people who have two cards or more has also increased with the many borrowers burying the heads in the sand over their money problems. Despite base rate cuts, the cost of credit shows no sign of ailing with consumers having to bear the brunt of the nations overspending.?

Accountants, KPMG, released a report citing credit card spending as one of the main reasons borrowers get into debt, claiming 130,000 people in the UK will become bankrupt in 2008, or they will be forced to make a deal, known as an Individual Voluntary Arrangements (IVA), with their creditors.

The dossier from KMPG found that a typical Individual Voluntary Arrangement will involve someone who owes more than ?50,000 and has five or more credit cards in their name.

The Joseph Rowntree Foundation, a social policy research and development charity, declared that repossessions were set to rise by up to 100,000 in 2008, the highest figure ever recorded. With only a small minority of these people having home insurance that will pay their mortgages should they lose their jobs, the picture for many looks bleak they warned.